TURN OF THE CENTURY

CENTURY PROPERTIES ANNUAL REPORT 2018

2018 THEME: TURN OF THE CENTURY 60% Increase in total revenue 72% Increase in net income

2018 was a landmark year for Century But that’s just the tip of the iceberg. Properties Group, Inc. (CPG): We With everything exciting that’s going experienced four consecutive quarters on, we are more than glad to share with of positive revenue growth, more you this comprehensive annual report buildings were completed and turned of CPG for 2018. over to satisfied homebuyers, new companies and partnerships were This report is just a glimpse of what’s in formed, and we made significant strides store for one of the ’ most to our portfolio expansion in order to dynamic companies. Beyond strategically grow the company. the facts and figures, charts and graphs, lies a company built with passion and From developing primarily standalone fueled by innovation. residential condominiums, CPG has grown by leaps and bounds into After 33 years in the business, Century creating masterplanned communities Properties remains relentless in blazing injected with life-enhancing concepts. new trails in the Philippine real estate In 2018, we grew even more and landscape. And we remain committed further expanded into allied real estate to deliver groundbreaking and life- segments, specifically affordable changing developments – constantly housing and commercial leasing. These evolving and always thinking a century new businesses, together with our ahead. in-city residential properties business, will be our growth pillars as we move We are . up and move on to the next exciting Building Passion since 1986. chapter of CPG. CONTENTS: Company Information ...... 1 Performance Highlights ...... 11 Message of the Chairman ...... 13 Business Landscape ...... 19 Business Strategy and Growth Platforms ...... 37 Our Projects ...... 55 Operational Sustainability ...... 103 Leadership Team ...... 121 Corporate Governance ...... 151 Financials ...... 209 COMPANY INFORMATION

About Century Properties Group From being concentrated in high-rise Century Properties Group (CPG) has residential properties, CPG undertook over three decades of experience in real a business expansion program to estate development, marketing, sales, diversify into allied areas of real estate. and property management. This diversification plan commenced five years ago with the goal of serving Founded in 1986 by Chairman Jose unmet market demands and increasing E.B. Antonio, CPG has grown as one revenue streams, while exercising of the country’s most reputable and business prudence and maintaining a recognized real estate companies. From robust and healthy balance sheet. a humble real estate marketing firm with only six employees, the company Today, Century Properties Group’s has evolved into a comprehensive portfolio consists of in-city vertical and property developments, affordable housing, and management conglomerate with office and commercial leasing. It has thousands of employees and agents in also ventured into tourism, leisure and 50 countries across the globe. hospitality developments as of 2017.

The company has earned a reputation CPG’s affordable housing brand, PHirst for revolutionizing housing concepts, Park Homes, has sold more than 3,000 including “fully-fitted, fully-furnished” housing units valued at Php4.4 billion units which have become an industry from its first three projects as of April 30, standard. It also introduced some of the 2019. PHirst Park Homes communities most groundbreaking and innovative in Tanza, ; Lipa, ; and developments never before seen in the San Pablo, are collectively 64 country, bringing distinctive value to its hectares in total land area with a total clients with unparalleled collaborations inventory of 6,000 units and a sales with global brands and designers such value of Php10.11 billion. PHirst Park as Armani/CASA, Versace Home, I.M. Pei, Homes now accounts for 10% of CPG’s the Trump Organization, Missoni Home, gross revenue. Philippe Starck and John Hitchcox, Daniel Libeskind, Paris Hilton, Mitsubishi The company’s leasable area will grow Corporation, and General Electric. from 133,000 square meters to 300,000

TURN OF THE CENTURY 1 COMPANY INFORMATION

square meters of gross floor area by the (CPMI) also engages in a wide range of year 2020 with a target of Php2 billion property management services, from RESIDENTIAL in revenues. Aggregate income from facilities management and auction BUILDINGS its leasing and property management services to lease and secondary sales. 24 businesses currently amounts to 8% of Through CPMI, the company also RESIDENTIAL total gross revenue. endeavors to ensure the properties it UNITS manages in maintaining and improving 13,001 As of December 30, 2018, CPG has their asset value to be safe and secured. SQM. TOTAL GROSS FLOOR completed 24 residential buildings, CPMI manages 46 projects as of AREA OF RESIDENTIAL consisting of 13,001 units with a total December 31, 2018 with 2.58 million PROJECTS gross floor area (GFA) of 962,563 square meters of GFA (with parking). 962,563 square meters (with parking); a retail Of the total, 65% of the projects CPMI SQM. TOTAL GROSS commercial building with 52,233 square manages were developed by third FLOOR AREA OF LEASING meters of GFA (with parking); a medical parties. Notable third-party developed 182,620 PROJECTS office building, comprised of 707 units projects under management include with 74,103 square meters of GFA (with the Asian Development Bank in Ortigas, parking); an office building with 56,284 One Corporate Center in Ortigas, BPI MEDICAL OFFICE UNITS sqm of GFA (with parking). This is in Buendia Center and 707 addition to the 19 buildings totaling in City, and Philippine National 4,128 units and 548,262 square meters Bank Financial Center in City. of GFA that were completed prior to 2010 by the founding principals’ prior Today, Century Properties Group’s development companies, the Meridien portfolio consists of in-city vertical Group of Companies. developments, affordable housing, and office and commercial leasing. It has The company, through subsidiary also ventured into tourism properties in Century Properties Management, Inc., recent years.

2 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 3 COMPANY & PROJECT AWARDS

2018 Philippines Property Awards 2014 South East Asia Trump Tower Philippines Property Awards Best Luxury Condominium Azure Urban Resort Residences Development in the Philippines – Best Mid-range Condo Development in the Philippines 2018 Philippines Property Awards BEST The Residences at Commonwealth 2014 Philippines Property Awards LUXURY CONDOMINIUM DEVELOPMENT Best Mid-range Condominium Azure Urban Resort Residences – Best MID-RANGE CONDOMINIUM DEVELOPMENT Development in the Philippines Condo Development – Philippines CONDOMINIUM DEVELOPMENT MIXED-USE DEVELOPMENT 2017 Philippines Property Awards 2014 Philippines Property Awards INTERIOR DESIGN SHOW HOME Acqua Private Residences – Livingstone – Highly Commended, PREMIERE REAL ESTATE DEVELOPER Highly Commended – Best Best Commercial Development (Retail) Condominium Development Century City Mall – Highly Commended, IN THE PHILIPPINES in the Philippines Best Commercial Architectural Design 2016 Philippines Property Awards 2013 Asia Pacific Property Awards Acqua Private Residences Acqua Iguazu – Best Condominium Development Acqua Private Residences in the Philippines Best Interior Design Show Home – Philippines 2016 Philippines Property Awards Acqua Private Residences 2011-2017 BCI Asia Awards Best Mid-Range Condominium CPG as one of the Top 10 Developers, Award for Metro Philippines

2016 Philippines Property Awards 2013 Housing and Land Use The Residences at Commonwealth Regulatory Board Highly Commended in the Best Century Limitless Corporation Mid-Range Condominium Award Developer with the Most Number Category for of Condominium Units Licensed Under PD 957 2016 Philippines Property Awards Acqua Private Residences 2012 Southeast Asia Best Condominium Development Property Awards in the Philippines Chairman Jose E.B. Antonio Property Report Real Estate 2016 Philippines Property Awards Personality of the Year Acqua Private Residences Best Mid-Range Condominium 2014 The Asset Triple A Award for Metro Manila Transaction Banking – Treasury, Trade & Risk Management Awards 2016 Philippines Property Awards Best Structured Trade Finance The Residences at Commonwealth Solution in the Philippines Highly Commended in the Best Mid-Range Condominium Award 2013 Capital Finance Category for Metro Manila International Awards Best Premier Real Estate 2015 Asia Pacific Property Awards Developer, Philippines – Best Mixed-Use Development – Philippines 2013 Corporate Governance Asia One of the Most Promising Companies

4 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 5 6 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 7 Launched PHirst Park Homes, CPG’s affordable housing brand for first homebuyers, and PHirst Park Homes Tanza COMPANY MILESTONES in Cavite

Completed 4 more buildings with a total sales value of over Php 11.6 billion Completed 5 buildings Breaks ground with with a total sales value of Mitsubishi Corporation for over Php 12.7 billion Century Diamond Tower Signed a joint venture Partnered with Mitsubishi agreement with Corporation to develop Mitsubishi Corporation for housing units for First Century Diamond Tower Home buyers

Launched Batulao Artscapes, its first residential tourism estate

Opened Century City Completed “backdoor Mall, the company’s first listing” with EAPRC retail mall Issued PHP1.6 billion Completed maiden Century Properties Expanded into large-scale convertible bond to offering of Php 2.7 billion Management Inc. (CPMI) mixed-use developments Dutch pension fund APG Unsecured Fixed Rate – the country’s first Entered the luxury with Century City in Retail Bond independent real estate condominium segment Launched first large- Makati Started global brand Php 2.3 Billion re-IPO Raised Php 1.6 billion property management Began development of with the completion of scale house and lot collaborations for selling 1.33 billion shares, from 800 million shares Completed issuance of Began operations company, was established upscale condominiums Essensa East Forbes development with Entered affordable to residential projects increasing free float to issued, increasing free stock dividend with stock Canyon Ranch middle-income segment 27% float to 32% dividend rate of 20.66% 1986 1989 1991 – 1994 2000 2004 2006 – 2009 2010 – 2011 2012 2013 2014 2015 2016 2017

CPG and Mitsubishi Corporation form Topped Off Century Diamond Tower Launched PHirst Park Homes in Lipa, Batangas Opened Asian Century Center office Completed 26 buildings since becoming a publicly- Registered full year net income of Php 1.1 billion, a a joint venture company for affordable building in Bonifacio Global City Taguig listed company in 2012: 23 residential towers, 1 retail 2018 housing, PHirst Park Homes Inc. commercial building, 1 medical office building, and 1 remarkable 72% growth from Php 650 million in 2017 office building

8 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 9 2018 PERFORMANCE HIGHLIGHTS

Movement 2018 2017 Amount % REVENUE Real estate revenue 9,576.67 5,345.94 4,230.73 79.14% 60% Increase in total revenue Leasing revenue 407.27 341.66 65.61 19.20% Property management fee and other services 395.46 352.97 42.49 12.04% Interest income from real estate sales 322.48 665.20 (342.72) -51.52% Increase in net income to Php 1.1B 72% 10,701.88 6,705.77 3,996.11 59.59% COST AND EXPENSES increase in real estate revenue due to the Cost of real estate revenue 5,655.40 2,806.48 2,848.92 101.51% completion of Boracay, Osmeña East and Iguazu 79.1% Cost of leasing 227.75 237.81 (10.07) -4.23% towers, the start of sales recognition from our affordable housing segment, additional substantial progress in Cost of services 276.55 270.73 5.83 2.15% construction, and sales take up of on-going projects. 6,159.70 3,315.02 2,844.68 85.81% GROSS PROFIT 4,542.17 3,390.75 1,151.42 33.96% increase in leasing revenue due to higher 19.2% occupancy rates in our retail property Century City GENERAL, ADMINISTRATIVE AND SELLING EXPENSES 3,254.53 2,964.06 277.52 9.36% Mall and the Philippines’ largest medical mall, Centuria Medical OTHER INCOME (EXPENSES) Makati. Interest and other income 568.66 801.08 (245.36) -30.63% Gain from change in fair values of investment properties 376.90 286.03 90.87 31.77% increase in property management fee and other Gain (loss) from change in fair value of derivatives (Note 9) 115.79 (35.61) 151.41 425.13% 12.0% services were significantly due to additional properties being managed, specifically three more BPI Income from investment in associate 12.43 – 12.43 100.00% buildings and the newly completed Century properties. Unrealized foreign exchange loss (145.19) (53.85) 91.34 169.62% Interest and other financing charges (594.28) (403.48) 190.80 47.29% 334.31 594.16 (259.85) -43.73% INCOME BEFORE INCOME TAX 1,621.96 1,020.85 601.11 58.88% PROVISION FOR INCOME TAX 503.77 370.92 132.85 35.81% NET INCOME 1,118.19 649.93 468.26 72.05%

10 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 11 MESSAGE FROM THE CHAIRMAN MESSAGE OF THE CHAIRMAN, PRESIDENT & CEO

Our Dear Shareholders: The Philippine peso strengthened to 52 high-rise condominium projects, CPG level on rising remittances, investment expanded into other areas. We now I warmly welcome you to the Annual flows and a robust domestic economy. have four business platforms: in-city Shareholders’ Meeting of Century Our country’s economic managers developments including our residential Properties Group, Inc.! are confident that the Philippines’ condominium projects; investment GDP growth will be sustained in properties that will provide recurring Thank you for joining us to review the 2019, targeting a growth of 6.5 % and income, horizontal affordable housing past fiscal year and to talk about the maintaining the country’s stature as one outside of Metro Manila that we future of our company. of Asia’s fastest growing economies. now call PHirst Park Homes, Inc.; and leisure and tourism. We also maintain Year 2018 was exciting and fruitful Growth drivers will of course include our property and asset management for CPG. Following our past 33 years the business process outsourcing business through CPMI or Century of significant milestones, we have (IT-BPO) sector and tourism. The Properties Management, Inc. completed thousands of units, formed Asian Development Bank said a low strategic partnerships, and forged on unemployment rate, the sustained rise Under our in-city vertical developments, with our diversification program that in remittances, and increased public we have completed 3 additional produced very remarkable results. investments in infrastructure will also buildings in 2018 equivalent to 1,185 Today, I am very proud to share with contribute much to the Philippines’ units and 77,740 square meters of gross you our accomplishments and the growth. floor area and Php7.3 billion in sales favorable economic backdrop that is value. These are Boracay Tower in Azure, further driving our growth. While it is widely known that our Osmeña East Tower in Commonwealth country’s growth has resulted to a and Iguazu Tower in Acqua. Our macroeconomic environment housing backlog of 6 million units, remains positive. The Philippines developers have barely kept pace with Overall, CPG has sold 91% of over 20,000 continues its resilience and registered supply. Unmet demand reached 6.6 units launched and completed 26 a healthy 6.2% GDP growth. Such million in 2015. By the year 2030, it is buildings with more than 14,000 units growth was largely due to the country’s estimated that housing needs will reach and 1.3 million square meters of gross consistently strong domestic demand, 12 million units. floor area since it became a publicly brought forth by an increasing middle listed company in 2012. class that is comprised not only of OFW Against this backdrop, CPG made families, but also by the workforce of a significant progress in 2018 with In 2017, CPG started expanding outside burgeoning IT, BPO, and KPO sector. its full-on entry into the affordable of Metro Manila for affordable housing, housing segment, targeting to supply launching PHirst Park Homes Tanza in Consumer price inflation went as high homes in high-growth areas within the Tanza, Cavite. This product segment as 6.7% last year which largely affected Philippines. for first homebuyers was born out of the GDP growth, but have eased CPG’s commitment to help address the considerably over the past months and As you very well know, we took country’s serious housing backlog while is now well within the 2 to 4% target of strides to build a stronger and better elevating the standards in its category the Bangko Sentral ng Pilipinas (BSP). company 4 years ago through a at very competitive price points. The BSP imposed a total of 175- basis diversification program that increased point interest rate hikes in 2018 to our investments in allied real estate “A first that lasts” is the brand’s core temper the rising inflation. sectors. From a developer focused on message, underscoring the company’s

14 Century Properties Group Annual Report 2018 We took strides to build a stronger and better company 4 years ago through a diversification program that increased our investments in allied real estate sectors.

The ultimate goal is to grow CPG’s businesses and achieve a revenue mix of 1/3 each from our in-city developments, affordable housing, and leasing to have a diversified net income mix with more sustainable cash flow and recurring income

We will execute this strategy by offerings through the 4Cs: a Complete have sold 70% of 672 launched units, Our diversification plan through our Our total assets increased by Php6.8 We will execute this strategy by earmarking Php 30 billion in the home with a fence and gate; equivalent to Php2.9 billion in sales four business platforms have started B to Php49.4 B in 2018, mainly due earmarking Php 30 billion in the next next 3 years Conceptive amenities; Connectivity value as of December 2018. We still have bearing fruit and we are excited for the to higher cash balance and increase 3 years to continue driving CPG’s through WiFi nodes and shuttle a considerable land bank in our Batulao, future. in construction of our investment expansion into allied real estate The company will pursue transport; and Convenience. Batangas and San Vicente, Palawan properties. segments, specifically horizontal the development of mid-rise properties and are excited to launch Our full year 2018 net income of Php1.1 affordable housing in key urban centers residential buildings in the CBDs Following the success of our Tanza new products in this category at the billion is a remarkable 72% growth As of March 2019, total assets amounted outside Metro Manila, commercial and its peripheries. project, we formed PHirst Park Homes most favorable time. from P650 million in 2017, owing to to P49.3 billion. Our Debt to EBITDA has leasing, and a new product line of Inc., a joint venture company with the the additional substantial progress in improved from 12x in 2017 to 10x in medium-rise residential buildings. PHirst Park Homes Inc. will launch global business enterprise Mitsubishi CPG is also on a continuous rollout of construction and sales take up of our 2018. This has further improved to 8.3 33,000 affordable housing units in Corporation in 2018 to launch about 15 its leasing assets to achieve a steady on-going in-city vertical developments, times in the first quarter of 2019. We The company will pursue the 15 projects within the next 4 years projects within the next 4 years with revenue stream. By the end of 2018, an office tower completion, and our hope to keep this at single digit as we development of mid-rise residential with Php 57 billion in project sales approximately 33,000 units. Each site we officially opened the Asian Century affordable housing business. continue to build our revenue stream in buildings in the CBDs and its value will be 15 to 20 hectares equivalent Center, a 22-storey office building in the next years. peripheries. Pricing will be within the to around Php57 billion in Project Bonifacio Global City that was 75% For the first quarter of 2019, CPG medium cost category and identified Leasing assets increased three Sales Value, with capital expenditures leased out. We are also scheduled continued its growth momentum CPG’s Return on Equity has also project locations are in City, times from 2017 to 2019. By 2020, estimated at around Php10 B over the to complete by the end of 2019 the with a remarkable 28% increase in net increased from 4.1% in 2017 to 6.6% in , and growth centers in our leasing revenues are expected first 5 years. Century Diamond Tower, another joint- income to Php 384 million compared to 2018 and 8.6% in the 1st quarter of 2019. Pampanga. The first projects under the to hit Php 2 billion. venture project we have with Mitsubishi Php 300 million in the same period last brand will be launched within the next The market reception to our affordable Corporation, which will add another year. We expect to sustain this positive In terms of segment revenue 12 months. 250 hectares of land bank will housing line was highly remarkable that 58,000 square meters of leasable area to streak in the coming quarters. contribution, the ultimate goal is to expand our footprint in city, to date, we have launched three PHirst our portfolio. grow CPG’s businesses and achieve The company will also continue strategic tourism destinations, Park Homes communities – one in Earnings before interest, tax, a revenue mix of 1/3 each from our expanding outside of Metro Manila and provincial growth centers Tanza, Cavite; one in Lipa, Batangas; and Our leasing assets increased three times depreciation and amortization (EBITDA) in-city developments through [mid-rise through PHirst Park Homes, our one in San Pablo, Laguna. In total this from 2017 to 2019, and by 2020, our in the full year of 2018 amounted to buildings or MRBs]; affordable housing horizontal affordable housing product. is 64 hectares; 6,000 units and Php10.11 leasing revenues are expected to hit P2 billion, 55% higher than P1.3 billion through PHirst Park Homes, and leasing We will roll out our projects in Pandi, billion is sales value. This segment’s Php 2 billion. in 2017. For the first quarter of 2019, through our new commercial assets – Bulacan; General Trias, Cavite, and contributions to the bottom line have we posted an EBITDA of P620M, a to have a diversified net income mix Calamba, Laguna in the coming To those who continuously work grown to 11% of our 2018 revenue and CPMI, CPG’s property management arm, 35% increase from P460M in the same with more sustainable cash flow and months. to elevate CPG to new heights, we 23% of our net income. manages 46 projects as of December period last year. recurring income are grateful to all of your time, hard 31, 2018 with 2.58 million sq.m of GFA CPG also plans to build mixed-use work and support. Thank you to We thank Mitsubishi Corporation for (with parking) under management. Net income after tax (NIAT) margin Such goal stems from our business leasing projects in Pampanga, Quezon our shareholders for your trust and its trust and confidence and for being Of the total, 65% of the projects CPMI improved to 10.4% from 9.7% due to strategy of: City, and Makati to further grow its confidence. Thank you to our Board of very valuable partners in bringing manages were developed by third reduction in operating expenses, as • Leveraging CPG’s industry leading 300,000 sqm of leasing assets as well as Directors for your steadfast dedication, quality housing to the first homebuyers’ parties. we endeavor to consistently improve reputation and 33-year experience in leasing revenues of P2B by 2020. the valuable perspectives you bring, market. efficiency in the company’s operations. the high-rise condominium market and your wise counsel. With all these new developments to develop mid-rise residential Overall this covers 250.6 hectares of With foreign tourism picking up and within CPG’s diversification program, it CPG’s Earnings Per Share improved to projects; land bank which we are building to Thank you and have a pleasant day. domestic tourism numbers even is my honor and privilege to note that P0.085 in 2018 from P0.054 in 2017. • Expanding outside of Metro Manila further expand our footprint in city, as higher, we continue to recognize the our company is in excellent form more for affordable housing projects; and well as strategic tourism destinations good opportunities in the still largely than ever and is poised to generate Our strong balance sheet supports our • Expanding our commercial leasing and provincial growth centers. untapped tourism and secondary further growth. growth strategy. portfolio prudently to diversify JOSE E.B. ANTONIO home market. Our leisure and tourism earnings and generate recurring The future is indeed bright and Chairman, President, and CEO development, Batulao Artscapes, income promising. Century Properties Group, Inc.

16 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 17 THE BUSINESS LANDSCAPE THE BUSINESS LANDSCAPE

The Philippines is poised to become the fastest growing economy in Asia. No less than the Asian Development Bank made this recent pronouncement based on the country’s stronger macroeconomic fundamentals, as well as its “unprecedented infrastructure overhaul, tax reform and young workforce.”

Recent upgrades in the Philippines’ emerging risks from currency comprised not only of overseas Filipino investment grade ratings are also volatility, slower growth, and global professionals and their families, but good indications of increased business macroeconomic headwinds.” also by a burgeoning IT, BPO, and KPO confidence and a buoyant economic • A stronger currency, with the sector. Domestic demand for goods environment. Our average pace of Philippine peso being among Asia’s is returning because of the easing growth in the last five years was 6.4%, turnaround stories as it bounced inflation, which is now well within the a far cry from a country that was once back after a slew of economic Bangko Sentral ng Pilipinas’ 2 to 4% branded the Sick Man of Asia and beset reforms, growing OFW remittances, target rate. with high inflation. and a proactive central bank policy according to Bloomberg. OFW remittances continue to be We have seen such remarkable growth • An improved balance sheet, resulting one of the main sources of our GDP in our country in the past decade that in several credit rating upgrades. growth with an astounding US$32.2 makes us even more optimistic about • A steady price environment, with million in 2018, and so is the IT-BPO the future. inflation easing in the first quarter of sector, which employs 1.19 million 2019 at 3.6%, and averaging at 2.7% employees and posted $23.8 billion This growth story is backed by solid from 2014 to 2018. in revenues as of June 2018. By 2022, indicators: the latter sector targets to generate • More than 70 quarters of As a result, the overall economic a total of 1.8 million direct jobs, 7.6 uninterrupted economic growth outlook remains positive and million more direct and indirect IT-BPM since 2001, with a 6.4% average confidence is high among investors, the (information technology-business growth from 2014 to 2018. business sector, and consumers. process management) employment, • A healthier and a much stronger 500,000 jobs outside of the National Philippine banking system, which The country’s sound fundamentals Capital Region, and earn US$40 billion bagged a higher score early this are backed by a strong domestic in revenues – making up 15% of the year for its improved institutional consumption, brought forth by global IT-BPM market share. framework and ability to “withstand an increasing middle class that is

20 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 21 THE BUSINESS LANDSCAPE THE “ASIAN CENTURY” Asia will outgrow the world in the Our economic growth is also directly trillion in 2010, compared to the US, next decade and associated with all the exciting events which would have only reached US$ happening in Asia. 25 trillion and Europe, US$ 23 trillion, in a half. The World the same period. WEF said the region Economic Forum Researchers predict that in 15 years, makes up 60 percent of the total world two-thirds of the world’s middle class population, with ten times as many (WEF) very aptly would be found in this region, and people as Europe and twelve times as calls this period, 60 percent of the global middle-class many people as North America. spending will come from Asia. That is an the “Asian Century.” estimated US$ 33 trillion of the potential The 10-nation Association of Southeast US$ 56 trillion in forecasted world Asian Nations (ASEAN) is also a bright spending. spot in this regional story. According to HSBC, the present China-US trade boom of the ASEAN is resulting in the The bold pronouncement is, Asia will tensions will have a negative impact emergence of a new middle class.” outgrow the world in the next decade overall, but this impact is seen far less and a half. The World Economic Forum in ASEAN countries, where “slowing The ASEAN has a population of 600 (WEF) very aptly calls this period, the exports will be muted by resilient million and the International Monetary “Asian Century.” domestic demand.” Fund (IMF) notes that half of its projected population will be under the In one of its market reports, Leechiu A previous HSBC report also said the age of 30. This potential market, notes Property Consultants said Asia will ASEAN is “on its way to become one the Asian Development Bank, is larger contribute 50% of the world’s Gross of the world’s leading consumption than the European Union and North Domestic Product (GDP) by 2020. hubs, fueling demand for a variety of America, and next to China and India, goods and services, including financial.” ASEAN has the “world’s third largest Asia’s GDP is predicted to reach US$ The report adds that the “economic labor force that is relatively young.” 38 trillion by 2030 from just US$ 12

22 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 23 THE BUSINESS LANDSCAPE YOUNG POPULATION

The Philippines is contributing much to the ASEAN’s booming population, with an annual population growth rate of 1.6% and 107 million-strong Filipinos. In addition, our country is going through a golden demographic age – where 50% are below 24 years old – providing the labor pool to growing industries and business sectors, and fueling consumption, retail, and housing demand.

Based on data from the Philippine According to the World Bank, Philippine The PSA reports that household final Statistics Authority (PSA), in April 2019 IT-BPO revenue will reach US$ 38.9 consumption expenditure grew by the total population 15 years old and billion by 2022. An additional 654,000 5.6 percent in the second quarter over was estimated at 72.5 million. Of jobs will be generated for the same of 2019. Food and non-alcoholic this number, 44.5 million persons were period. Further, business consulting beverages share 41.3 percent of in the labor force, placing the labor firms observed that the United States is the total household expenditure. force participation rate (LFPR) at 61.4 investing heavily in knowledge-based Education is at 14.5 percent. Housing, percent. process outsourcing (KPOs), which water, electricity, gas and other fuels expands the Philippines’ hold “beyond are at 5.8 percent; Communication at This young and 72.5 million-strong back office and call centers, and into 5.1 percent; Transport at 2.9 percent; workforce gives the Philippines more complex services such as legal Restaurants and Hotels at 5.4 percent; compelling advantage over other work, fintech, accounting, engineering and Furnishings, Household Equipment countries in Asia, according to business and animation. The IT-BPM Roadmap and Routine Household Maintenance at analysts. The country’s higher literacy anticipates these mid-skill to high-skill 4.7 percent. rate of 96.6% and English proficiency jobs will represent 73 percent of the are credited for its rising productivity industry by 2022.” More and more people are going to growth since the last decade, said a malls and engaging in online shopping World Bank Open Data report. The growing population, coupled with to purchase gadgets, cars, homes, high LFPR, are driving strong domestic and travel more often. They are also The Information Technology and consumption. With about 1.2 million spending on education and health care Business Process Association of the jobs coming in from the IT-BPO industry – things that will improve their stature Philippines (IBPAP) forecasts that the as well as growing remittances of more in and quality of life. IT-BPO industry’s growth will continue than US$30 billion yearly from OFWs to through 2022, following its upward their families back home, the domestic growth trend and US$22.1 billion consumer market is increasing. revenue in 2017.

24 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 25 THE BUSINESS LANDSCAPE THE GOLDEN AGE OF INFRASTRUCTURE

Adequate infrastructure is critical to We are now entering the ‘Golden Age of our rapid economic growth, and it is highly encouraging to see the national Infrastructure’–where our structures, facilities, and government increase its spending on services are safe, efficient, reliable, cost-effective, major infrastructure programs not just in Metro Mania but across the country. resilient, and sustainable–and its effects will be widely With all these new developments, CPG manifested through the smooth and efficient flow of will continue to focus its land banking in areas where major infrastructure people, goods, services, and information by way of projects are being rolled out to unlock increased mobility and seamless interconnection. real estate opportunities and deliver highly accessible communities and – Secretary Mark Villar, The Department of Public Works and Highways destinations.

The Asian Development Bank, a partner of the government’s Build, Build, Build program, noted how the government the south and adding 14 stations from More bridges, airports, and highways has ramped up infrastructure spending North Avenue to San Jose Del Monte, are being built in numerous parts of to “6 percent of the Gross Domestic Bulacan by 2023. the country from to Mindanao. Product (GDP) at present, with a target Also underway are additional to “reach 7.4 percent of the GDP in Farther out of Metro Manila, the schools, evacuation centers and 2022.” 45-kilometer Cavite-Laguna Expressway flood management projects. Some connecting Kawit, Cavite to SLEX 28 projects under the Build, Build There are more than 21 major land Mamplasan will reduce travel time Build program could be completed transportation projects ongoing that from 1.5 hours to 45 minutes; the Luzon before 2022, according to the National will dramatically cut back travel time for Spine Expressway Network Program Economic Development Authority. all. Within the capital, worth noting are will construct 940 kilometers of high- the Metro Manila Stage 3 from standard highways and expressways; The government’s increased Quezon City to Makati (from two hours the NLEX Harbor Link expressway will infrastructure spending will not to 20 minutes); the NAIA X Phase II that provide access to NLEX without passing only generate jobs (4.2 million jobs adds a four-lane expressway from NAIA through EDSA or Balintawak Toll Plaza; generated since 2016) and promote to PAGCOR Entertainment City (from 24 the Philippine National Railways (PNR) higher incomes but will also stimulate minutes to 8 minutes); the NLEX-SLEX North 2 Project will connect Malolos in demand and significantly increase connector road (from 2 hours to 20 Bulacan, Clark Airport, and Clark Green economic output overall. In the long minutes); the BGC- Link City; and the Clark International Airport term, it will increase productivity as Road Project (to reduce travel time to 12 New Terminal Building will increase the mobility improves, and goods, services, minutes); and of course, the MRT 7 that airport’s capacity by 8 million per year and key destinations become more targets to aid in decongesting EDSA and accelerate the growth of Central accessible. by connecting our train systems from Luzon.

26 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 27 THE BUSINESS LANDSCAPE “NEXT EAST ASIAN SUCCESS STORY”

With solid macro fundamentals and sustained reforms, the outlook for the Philippines is it will stay resilient to external headwinds and can sustain its economic growth.

The World Bank said, “the Philippines If the current administration’s additional Opportunities” (TRABAHO Bill), formerly has the potential to become the proposed tax reforms will be approved the “TRAIN 2”. Among its important next East Asian success story”, and by Congress, a bill seeking to slash the provisions are the reduction of the the country’s vision to “become a corporate income tax rate will boost the corporate income tax rate from the prosperous, resilient, middle-class country’s competitiveness in attracting current 30% to 28% in 2021, 26% in society free of poverty by 2040 is an foreign direct investments while 2023, 24% in 2025, 22% in 2027, and 20% achievable goal.” rationalizing fiscal incentives to ensure in 2029. that tax perks are properly targeted, Achieving this will require continued performance-based, time-bound and reforms, added the World Bank, citing transparent. the government’s comprehensive tax reform program that made “the tax This bill, currently under deliberation, system equitable to taxpayers” and is HB 8083 or the “Tax Reform for “raising more revenues to finance the Attracting Better and High-Quality government’s priority programs and projects.”

28 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 29 THE BUSINESS LANDSCAPE RIPPLE EFFECT AND NEW OPPORTUNITIES IN RESIDENTIAL REAL ESTATE

The overall positive outlook and and local professionals. The demand is strong fundamentals of the Philippines specifically coming from the “take-up of Based on its search data from the continue to create a ripple effect on the newly-completed condominium units first half of 2018, Lamudi said that economy and propel the growth of the especially in the established business “those looking for homes priced real estate sector. districts of Makati CBD, , at Php3 million or less looked into and the Bay Area.” Supply can still properties priced Php1.7-3 million. This The real estate industry, in turn, meet the forecasted demand of 7,000 was followed by searches for homes affects about 50 other industries: from units within 2019, and Metro Manila’s within the next price range-between construction materials; plumbing and condominium stock within the next Php450,000 and Php1.7 million. Those electrical supplies; fittings, furnishings, three years “is expected to grow 19.3% being sold for less than Php450,000 and furniture; creating new retail, office to 141,760 units.” only received a fraction of the searches and residential communities across or at about six percent.” the country; to providing labor and AFFORDABLE employment opportunities – thereby Online searches came mostly from contributing further to the country’s HORIZONTAL HOUSING women at 64%, and the dominant age Affordable housing continues to be economic growth. for searchers of affordable homes is a bright spot in the residential real within a young bracket of 25-34 years estate sector for property developers. Notable property consultants Colliers, old. Housing seekers for the Php1.7-3 Philippine property portal Lamudi, JLL, and Leechiu had in fact posted million priced homes are from Quezon in its 2018 affordable housing study, very positive 2018 results, a double- City (40%), Makati (21%), Manila (10%), said the supply of affordable homes digit growth forecast for 2019, and and Bacoor (5%). in the country has not kept up with new opportunities for the sector in the the demand and quoted the industry coming years. With the “Build, Build, Build” program report “Impact of Housing Activities on progressing and improving connectivity the Philippine Economy” (by the Center from the Philippine capital to the IN-CITY VERTICAL for Research and Communication of the outskirts, key growth cities, and the University of Asia and the Pacific and DEVELOPMENTS provinces, more developments will In its Q4 2018 and Q1 2019 market Subdivision and Housing Developers be sure to follow and make home reports, Colliers underscored the strong Association), which puts the backlog at ownership for Filipinos even more demand in the residential pre-selling 6.7 million in 2015. Add this to the new affordable and inclusive – plus the and leasing markets for condominiums, housing need for the period 2016 to hours and cost of commute much more noting the contribution of the 2030 at approximately 5.6 million and manageable. secondary market comprised of foreign the total would be 12.3 million homes.

30 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 31 THE BUSINESS LANDSCAPE RIPPLE EFFECT AND NEW OPPORTUNITIES

COMMERCIAL, OFFICE For the office sector, Leechiu Property Consultants said significant demand continues to come from IT-BPM industry (information technology and business process management) with such upward trend seen since 2017 and “now having 102,000 square meters take-up in three months (of 2019).”

The firm’s chief executive officer David Leechiu noted: We expect for it to grow at a faster pace and reach the forecasted 450,000 sqm take-up in 2019 should there be more PEZA (Philippine Economic Zone Authority) spaces available in the market.” He added that with or without the second package up to Business Process Outsourcing Additionally, there is much interest of the Tax Reform for Acceleration and (BPO), Online Gaming, and Flexible in Philippine real estate investment Inclusion (TRAIN), more IT-BPM firms Workspace providers. trusts (REITs), which the South China are coming back after completing Morning Post (SCMP) said will likely their diversification program from the Solid demand maintained the growth take off this year after the government Philippines, and because of labor wages of the office rental market, JLL said, amends a REIT law passed more than a in the United States which are climbing despite “interest hikes, delayed decade ago with clearer and perhaps to new highs. Philippine Economic Zone Authority more relaxed implementing rules (PEZA) accreditations on buildings and and regulations. The SCMP report In an Inquirer report, JLL stated that an apprehensions on the Tax Reform for states that the country’s REIT market estimated 1 million square meters of Acceleration and Inclusion (TRAIN) 2 could be worth between US$8 and office space was added in 2018 to the law. Capital values also gained steadily US$9 billion, amidst a bullish property current stock. Of the 9.1 million existing due to the sound business environment sector, growing economy, and the office space, 72% had been leased out. which continued to buoy investors’ government’s aggressive infrastructure Vacancy rate remained at a manageable interest.” projects. 7%. JLL attributes the office space take

32 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 33 THE BUSINESS LANDSCAPE RIPPLE EFFECT AND NEW OPPORTUNITIES

CO-LIVING, CO-WORKING With economic development also buyers lease out their units and attain alone from the 80 centers recorded in comes evolving lifestyles and work their anticipated rental yields.” 2017. Colliers International refers to the cultures. The Philippines has seen flexible workspace as “a fundamental a “social revolution” in recent years, Co-working spaces, according to part of commercial real estate” in their where more and more of the younger Lamudi, are flexible or temporary 2018 report. population engage in a freelance or workspaces - shared office spaces so-called “gig economy” and no longer managed by operators for freelance Lamudi further shared that “Offshoring need a traditional office setup in order workers, startup companies, smaller and Outsourcing (O&O) and corporate to complete a task. For conventional corporates, and information technology businesses are the main occupiers of office workers, employees and even firms. Leasing comes with basic serviced offices followed by startups students, the increasing amount of equipment (phone lines, desks, and and smaller enterprises such as time spent on traffic around the metro chairs, to name a few) and tenants or corporate and IT firms.” continues to largely affect productivity. individuals are given access to these without the requirement of a long-term “This demand can be associated with For both markets, Co-living and Co- commitment in terms of contract or three things: (1) the lack of big space, Working spaces are eyed as the best lease duration. (2) the increase in the number of small solutions. businesses, and (3) the growth in the A report by the flexible workspace need for a more flexible work schedule Co-living spaces are modern specialist The Instant Group said that demanded by the workforce. This kind dormitories where a genuine sense “the demand for flexible workspaces of work arrangement is said to improve of community is fostered while using in the Asia Pacific (APAC) has had the productivity and efficiency among shared amenities and facilities at very fastest growth in the world over the workers and this was reported as the attractive prices, and often in locations last 12 months.” The compounded key benefit and the primary driver of strategically located near schools, places annual growth rate (CAGR) of flexible this change.” of work, and access to retail and other workspaces in the Asia Pacific from 2014 modern conveniences. The community to 2017 is currently estimated at 35.7%, As an active participant to nation- is cultivated by a professional host. exponentially faster than the recorded building, Century Properties Group, CAGR of U.S. at 25.7% and Europe at Inc. has begun to seize these exciting With increased IT-BPM activity and 21.6%. market opportunities to create the emergence of offshore gaming, worthwhile lifestyle experiences for its Colliers recommended for developers Seven out of the 10 largest and fastest- customers and build shareholder value to offer “creative leasing models such as growing global markets for flexible over time. Given all the right conditions, co-living, highlight features of projects workspace are found in the Asia Pacific, the company is highly optimistic such as landscaping, retail options, and according to the report. “Hong Kong about the future of the Philippines and accessibility.” Aside from the growing is still the largest city in Asia for flex commits to align its business strategies demand for such spaces coming from workplace with 340 identified centers.” to where pressing demands are, as well working professionals and students, as keep its ears on the ground for new such a “leasing scheme could also help In the Philippines, there are currently market needs and desires that we need 110 coworking spaces in Metro Manila to serve.

34 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 35 OUR BUSINESS STRATEGY AND GROWTH PLATFORMS

With a robust macroeconomic environment and supportive government policies, Century Properties Group, Inc. (CPG) will seize the right opportunities to deliver sustainable growth in the long term for its customers and shareholders.

Our company has made significant headway in our diversification program as we increased investments in allied real estate sectors and expanded outside Metro Manila. From being concentrated in high-rise condominium projects, CPG undertook a diversification plan that commenced four years ago. We now have three main growth platforms which will create a healthy mix of projects:

(1) In-city developments that include our residential condominium projects (2) Investment properties (3) Horizontal affordable housing outside of Metro Manila

New CPG businesses will soon be launched from the above growth platforms as we continue to build the company’s brand equity while evolving with new, innovative projects that are market- relevant and are expected to drive long-term sustainable growth.

CPG will to grow these businesses and achieve a revenue mix of 1/3 each from our in-city developments (including our new upcoming product line of mid-rise buildings or MRBs); affordable housing through PHirst Park Homes; and leasing through our new commercial assets. This will allow the company to have a diversified net income mix with more sustainable cash flow and recurring income.

36 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 37 Completed Projects Since CPG’s Public Listing

Location Type GFA in sq.m. Units Year (with parking) Completed Century City Gramercy Residences Makati City Residential 121,595 1,432 2012 IN-CITY VERTICAL Knightsbridge Residences Makati City Residential 87,717 1,329 2013 DEVELOPMENTS Makati City Residential 64,304 516 2016 Trump Tower Makati City Residential 55,504 267 2017 Subtotal 329,120 3,544 Our real estate revenue grew by substantial progress in construction; 79.14% on the back of several project and the sales take up of on-going Azure Urban Resort Residences completions, including the Boracay projects. Santorini Parañaque City Residential 36,126 553 2013 tower at Azure Urban Resort Residences Rio Parañaque City Residential 42,898 756 2013 in Paranaque City, Osmeña East tower From 2012 to 2018, Century Properties St. Tropez Parañaque City Residential 36,260 580 2014 at The Residences at Commonwealth Group, Inc. has completed 23 residential in Quezon City, and the Iguazu projects, consisting of 13,001 units and Positano Parañaque City Residential 35,164 597 2015 tower at Acqua Private Residences in an aggregate gross floor area (GFA) of Miami Parañaque City Residential 34,954 559 2015 Mandaluyong City; as well as additional 962,563 sq.m. (inclusive of parking). Maui Parañaque City Residential 41,235 601 2016 Maldives Paranaque City Residential 28,859 385 2017 Boracay Parañaque City Residential 27,713 473 2018 Subtotal 283,208 4,504

Acqua Private Residences Niagara Mandaluyong City Residential 33,709 474 2015 Sutherland Mandaluyong City Residential 41,705 735 2015 Dettifoss Mandaluyong City Residential 36,536 607 2016 Livingstone Mandaluyong City Residential 40,251 675 2016 Iguazu Mandaluyong City Residential 35,937 492 2018 Subtotal 188,139 2,983

The Residences at Commonwealth by Century Osmeña West Quezon City Residential 14,525 158 2015 Quezon North Quezon City Residential 17,760 285 2017 Roxas East Quezon City Residential 27,255 389 2017 Osmeña East Quezon City Residential 14,089 220 2018 Subtotal 73,630 1,052

Canyon Ranch Phase 1 & 2 Carmona, Cavite Residential 79,178 776 Moderno Carmona, Cavite Residential 9,289 142 Subtotal 88,467 918 Grand Total 962,563 13,001

Century City Mall Makati City Retail 52,233 N/A 2013 Centuria Medical Makati (168 units for lease) Makati City Medical Office 74,103 707 2015 Asian Century Center BGC, Taguig City Office Building 56,284 55 2018 Total 182,620

Note: Excludes projects completed by Meridien

38 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 39 Beginning 2019, we will grow this in-city the condominium market to foray We will leverage vertical developments platform into into mid-rise condominium and town our industry-leading TRANSIT CONNECTIVITY VIA THE P2P a new business with an upcoming homes projects, which shall be less product line for the young workforce, capital intensive, and which will have a reputation in the Century City, Makati is the newest stop signaling our commitment to provide quicker cash cycle. We shall seek to also high-rise condominium of and NAIA P2P buses the affordable to middle-income complete these projects within three (3) segment with quality residential years, as opposed to the current 5-year market to develop properties. construction cycle, in order to reduce With traffic congestion and The P2P also benefits the estimated mid-rise condominium carrying costs in general, administrative the availability of efficient mass 2,500 residents of Century City – As we have completed 23 out and interest expenses. developments. transportation a common problem home to , of 32 launched high rise condo among commuters these days, CPGI has the Knightsbridge Residences, the buildings from 2012 to 2018, with the This shall be accomplished through started collaborating with P2P of Point- Milano Residences, and Trump Tower remaining nine (9) buildings to be our land bank and joint venture to-Point bus companies to make its Philippines, the four-storey Century substantially completed in the next developments in our upcoming mixed- properties a regular pick-up and drop- City Mall, and the 28-floor outpatient two years, we will seek to leverage use projects in various sites in Quezon off transport hub. The RRCG buses from Centuria Medical Makati. Opening in our industry-leading reputation in City, Mandaluyong and Pampanga. Alabang to Makati / Makati to Alabang 2019 and beyond are the 35-storey have daily schedules to Century City Century Diamond Tower office building Mall, as are UBE buses from NAIA 1 to and the Armani Casa interior designed 3 Terminals to Makati/ Makati to NAIA Century Spire residential and office Terminals. tower.

The Century City Mall P2P stop in CPGI seeks to replicate such transport Poblacion, Makati is highly accessible connectivity and pedestrian mobility and ideal for those who are coming programs into its other communities from the south and traveling further in Quezon City, Paranaque City, and within Metro Manila. It is a short Mandaluyong City. walk from the Makati CBD, a jeepney ride away from Manila and EDSA Guadalupe, and is a bridge away from Mandaluyong.

40 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 41 Our new brand for in-city developments Century Prima is set to launch 4 new projects strategically Owning a home near one’s place of of Central Business Districts to save expansive and wider windows, higher located in: work has become increasingly difficult on commute or driving time from the floor to ceiling height, and more 1) Katipunan, Quezon City nowadays because of the prohibitive worsening traffic of the metro. Their storage spaces inside each home and 2) Mandaluyong City cost of land in the city. In response to highly strategic and accessible locations in the common areas. In addition, each 3) San Fernando, Pampanga this need, Century Properties Group will enable the young homeowner vertical villa will be designed to have a 4) Clark, Pampanga brings Century Prima, a new brand to be more productive and live a balcony whenever possible to provide and concept of in-city development convenient lifestyle at the same time. space for homeowners. targeting young professionals, These new developments will entrepreneurs, and young families who FASTER CONSTRUCTION TIME. AFFORDABLE PRICING. generate approximately close want to get better value for their hard- FASTER TURNOVER. Monthly amortizations will be carefully to 7,000 units with a Gross earned investments. To optimize the investment of the unit planned to suit the budget of the Revenue of Php 27 Billion and owner, construction time up to turnover young professional. Toward this end, a Net Income of Php5 Billion. Century Prima are medium-rise of each vertical villa is envisioned to be monthly amortizations will be kept at These projects are ready to residential developments located near no more than 24 months. This is made a price range of Php25,000 - Php35,000 central business districts that offer possible because Century Prima are low which can be covered with a bank be launched in the next 12 well-planned yet affordably priced density residential developments that financing for a period of up to 20 years. months. condominium units. These in-city aim to keep a floor to development area vertical villas are designed with features ratio of 3 to 5 or between 5-10 floors MOVING FORWARD. and amenities not usually offered by per building community. Century Prima is expected to grow other similar developments. These through land acquisitions and joint include highly-amenitized social areas The faster turnover cycle benefits ventures. Presently, we are set to equipped with fast wifi connections, not only the unit owner but also launch 4 new projects strategically ample storage spaces inside the units shareholders of Century Prima because located in 1) Katipunan, Quezon City, and within the common areas, fully of higher internal rate of returns and 2) Mandaluyong City 3) San Fernando, equipped gyms, hip lounges with lesser financial risks involved. Pampanga, and 4) Clark, Pampanga. signature coffee shops, and bars These new developments will generate providing avenues for the young, GENUINE VALUE FOR MONEY approximately close to 7,000 units with mobile professional to network or relax Century Prima developments will Gross Revenue of Php 27 Billion and Net after a hard day’s work. The architecture be designed by leading architects Income of Php5 Billion. These projects will be modern and reflect the exciting and backed by the track record of are ready to be launched in the next 12 lifestyle of young professionals. Century Properties Group in creating months. top-notch homes. To add value, each STRATEGIC LOCATIONS development will offer more generous These hip residential communities are parking areas, flexible modular vertical located within or near the periphery villas that can be combined if needed,

42 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 43 PRIME URBAN LEASING PROPERTIES

Prudent expansion of our commercial We completed the Asian Century In the future, we are looking at the leasing portfolio to diversify earnings Center in 2018 in Bonifacio Global bright prospects of Co-Living and and generate recurring income. City with 30,000 square meters of net Co-Working spaces, as another means leasable area. The building was already of growing our investment portfolio In addition to our 119,000 sq.m. of 75-percent leased prior to its December and our commercial leasing business, leasable space by 2019, wherein the 2018 opening. through our properties in Quezon City company plans to generate Php2 and Clark, Pampanga. billion of leasing revenue by 2020, we In the third quarter of 2019, CPGI is seek to develop more leasing projects delivering another PEZA-accredited Starting 2019, we will assign the Century once we have further completed green office building, Century Diamond Co. brand to this growth platform, our condominium projects that are Tower, in Century City Makati with which will organize all our commercial expected to generate free cash flow. 59,000 square meters of leasable space. ventures into one name and company. CPGI hopes that the leasing segment CPG’s first hotel project at Acqua, the “Co.” also stands for several other things, will contribute at least 30% of its net four-star business hotel Novotel Suites such as Community, Convenience, Co- income in the next three (3) years. Manila in partnership with ACCOR working and Co-Living, Collaboration, Hotels, will be completed in the same and Cooperation. This shall be accomplished through period. our land bank and joint venture developments in our mixed-use Our other leasing projects are Century developments in Katipunan, Quezon City Mall and Centuria Medical Makati, City, Novaliches, Quezon City and Clark whose higher occupancy rates for 2018 Global City, Pampanga. registered a 19.20% increase in leasing revenue for CPGI.

Completed Investment Properties

Location Type GFA in sq.m. Units Year (with parking) Completed Century City Mall Makati City Retail 52,233 N/A 2013 Centuria Medical Makati Makati City Medical Office 74,103 539 (sale) 2015 168 (lease) Asian Century Center BGC, Taguig City Office Building 56,284 55 2018 Total 182,620

Note: Excludes projects completed by Meridien

44 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 45 Building Passion for Life’s Firsts

Our horizontal affordable housing brand CPG’s 79.14% increase in real estate revenue for 2018 was due in part to the start of revenue recognition from the affordable housing segment, which amounted to Php1.1 billion for the for the year ended December 31, 2018.

Because the affordable housing market To supplement our balance sheet, CPGI P2.2 billion as of yearend December continues to be underserved, its has partnered with the global business 2018. A thousand homes are under backlog has reached 6.6 million homes enterprise Mitsubishi Corporation construction with 250 units completed. especially in the region, for the affordable market under the Of this, 100 homes were turned over at where most OFW families are based. company name PHirst Park Homes, Inc., 100% acceptance rate. Price range is at This prompted CPG in 2017 to enter wherein CPGI is a 60% common equity hpP1.5 to Php3.8 million. the first homebuyer market, which is holder, and Mitsubishi Corporation is a defined as units between Php1 million 40% common equity holder. The 20-hectare PHirst Park Homes in to Php3 million per housing unit. The Lipa, Batangas was launched in 2018 income per household for this market At present, the PHirst Park Homes brand and has sold out more than half of its is around Php40,000 to Php80,000 per has developments in Tanza, Cavite; total inventory as early as September month. Lipa, Batangas; and San Pablo, Laguna. 2018 with net sales for 900 out of a Collectively, this is 64 hectares in total total of 1,846 homes of approximately We plan to further land bank in key land area with a total inventory of 6,000 Php 1.16 billion (need yearend 2018 cities outside Metro Manila in Luzon, units and a sales value of Php 10.11 sales). Price range is at Php1.4 to Php3.3 and we are looking at sites that are billion. million. each within the 15 to 25-hectare range, wherein each development is planned PHirst sold 82% of 3,096 launched The 18.5-hectare PHirst Park Homes San to have around 3,000 units, and a units for Tanza and Lipa equivalent to Pablo was just launched in March 2016 population per site of around 12,000 approximately Php3.5B in sales value as and offers a total of 1,640 homes with people. We hope to acquire three (3) of yearend December 2018. Php2.7 billion in sales value. Homes are to five (5) sites per year. We target the priced at Php1.3 to 3. million. affordable segment to contribute at The 26-hectare PHirst Park Homes least 30% of CPGI’s net income in the Tanza, Cavite has sold 1,566 units next three (3) years. with a sales value of approximately

46 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 47 3 projects 64 hectares 6,385 units 10.11B value PHIRST PARK HOMES: A FIRST THAT LASTS

PHirst Park Homes Tanza Century Properties Group is their attractive and unique features. “PHirst Park Homes raises the bar of Tanza, Cavite transforming the affordable housing Townhouse and single attached units what affordable housing is and should 26 hectares category with PHirst Park Homes, the feature a move-in ready concept, be in the Philippines. We are pushing 2,877 units company’s first-home division and in which homes are delivered the envelope to make beautiful, well- Php 4.56 billion in sales value brand. Complete with a perimeter fence and designed homes attainable to a wider 515 completed units as of gate, finished ceiling, flooring and market – legacy homes that the next 283 units turned over PHirst Park Homes was born out of bathrooms. Provisions for future space generation will enjoy,” Celis said. Phase 1: 90.51% completion the company’s commitment to help expansions, and space for garden or a Phase 2: 50.83% completion address the country’s serious housing carport are included in the package. Century’s first home venture is a backlog while elevating the standards partnership with the global business PHirst Park Homes Lipa in its category at very competitive price PHirst is also introducing engaging and enterprise and one of Japan’s Lipa, Batangas points. “Conceptive” amenities that go beyond largest conglomerates, Mitsubishi 20 hectares the basics. The development pioneers Corporation. Within the next 5 years, 1,868 units “It is a premium brand within the the “Park Homes” concept, which the brand, under the company names Php 2.83 billion in sales value affordable housing category that integrates a Central Amenity Park, a PHirst Park Homes, Inc. will launch 347 ongoing house construction celebrates the very important milestone Linear Park, and other life-enhancing 15 masterplanned communities in Phase 1: 35.89% completion of first-time home ownership. More amenities into the masterplan. Calabarzon and Central Luzon with Phase 2: 14.89% completion importantly, it espouses pride of approximately 33,000 homes. Near- ownership,” said PHirst Park Homes In PHirst Park Homes Tanza, distinct term launches will be concentrated PHirst Park Homes San Pablo President Ricky Celis. amenities include an outdoor cinema in the booming provinces of Laguna, San Pablo, Laguna while PHirst Park Homes Lipa revives Bulacan and Cavite, where several 18 hectares The brand name is a play on the the joy of traditional Filipino games major infrastructure projects of the 1640 units words first and PH, which represent with activity nodes for piko (hop pod), government are in various stages of Php 2.72 billion in sales value hardworking Filipino end users who patintero (base pod), taguan (maze construction and development. Phase 1: 21.28% completion deserve only high quality first homes. pod), tumbang preso (treble pod with a PH also stands for the Park Homes giant pamato), and holen (marble pod). Century’s first home segment Future Locations: concept, which integrates greenery PHirst Park Homes San Pablo introduced effectively expands the company’s Pandi, Bulacan and life-enhancing amenities into the health and wellness amenities. portfolio of residential offerings, from General Trias, Cavite masterplan to create a truly liveable luxury and mid-priced condominiums Calamba, Laguna and lovable community for first PHirst communities are “Connected” to in the business districts and city homebuyers. life’s essentials through Wi-Fi zones with centres to first homes in horizontal *Project status updates are as of July 2019 reliable internet service and a shuttle communities within key growth areas “A first that lasts” is the brand’s core system that will take residents to the outside Metro Manila. message, underscoring the company’s nearest transport hub. “Convenience” 4Cs: Complete, Conceptive, Connected comes through a simplified buying Century’s leadership in pioneering and Convenient, said Loren Sales, process for future homeowners. developments over the last 32 years Customer Management Group Vice puts a stamp of quality on PHirst Park President of PHirst Park Homes. In terms of safety, the developments Homes, and the community’s heart have 24/7 security including a guard and soul will come from the many first The projects of PHirst Park Homes house, a high reinforced concrete memories there that its homeowners in Tanza, Cavite; Lipa, Batangas and perimeter fence and CCTV cameras and will create. San Pablo, Laguna have received monitoring system. It is also flood-free. positive market response because of

48 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 49 CENTURY PROPERTIES AND MITSUBISHI CORPORATION FORM A JOINT VENTURE COMPANY FOR AFFORDABLE HOUSING

In May 2018, Century Properties Group established technical and market scale, “Our joint venture partnership with The joint venture partners share Inc., led by its Chairman and CEO Jose it will then expand into the Visayas and Mitsubishi Corporation solidifies complimentary values and skill sets: E.B. Antonio announced the signing Mindanao regions. Century’s plans of diversification and Century Properties has over 30 years of of a joint venture agreement with strengthens its positioning not just experience in the real estate industry global business enterprise Mitsubishi Based on current plans, PHirst Park in the affordable housing category, and has pioneered real estate concepts Corporation to establish a company for Homes, Inc. aims to launch about 15 but in the broader first home buyer and industry firsts. Its mixed-use affordable housing. projects within the next 5 years with market. We thank Mitsubishi for its developments include Century City a total of roughly 33,000 units. Each continued trust and confidence in in Makati City, Azure Urban Resort Capitalizing on the country’s demand site will be 15 to 20 hectares and it Century Properties. Our relationship has Residences in Paranaque City, Acqua for affordable housing, which has an is currently in various stages of land certainly been fruitful to date with our Private Residences in Mandaluyong estimated backlog of roughly 6.6 million banking. This is equivalent to around two projects with them – both for the City, Azure North in San Fernando, units, the new joint venture company P57 billion in Project Sales Value, with office building in Century City, and in Pampanga, the Residences by will pursue the development of projects capital expenditures estimated at Tanza, Cavite to date. It is but natural to Commonwealth in Quezon City, and of scale in key locations outside of around P10 billion over the first 5 years. take it to the next level. We look forward Canyon Ranch in Carmona, Cavite. Metro Manila under a new brand called to forming this new company with PHirst Park Homes. To help achieve its sales target, PHirst Mitsubishi and work on many exciting Mitsubishi Corporation, on the other Park Homes will leverage on the projects that will bring the best value hand, brings to the partnership The joint venture company success of CPG in marketing not just in the market,” said Century Properties its expertise in development and named Phirst Park Homes, Inc. was locally, but also in territories where it Chairman and CEO Jose E.B. Antonio. technology. It is in businesses across incorporated after the Joint Venture has established offices such as North virtually every industry, including Agreement has secured clearance America, Europe, Middle East and Asia “The big housing demand, coupled industrial finance, energy, metals, from the Philippine Competition Pacific. by the natural and good chemistry machinery, chemicals, and daily living Commission. between Century Properties and essentials. Its current activities have (From left) CPG’s affordable housing business unit President, Ricky Celis; affordable housing Managing Director Carlo R. Antonio; CPG Under the terms of the agreement, Mitsubishi Corporation, led us to a expanded far beyond its traditional Chairman and CEO Jose E. B. Antonio; Masahiro Nagaoka, Deputy General Manager, Mitsubishi Corporation (Manila); Hidetoshi Suzuki, General Manager, ASEAN Urb an Development Department, Mitsubishi Corporation (Tokyo); Keiichi Matsunaga, General Manager, The decision to pursue a portfolio of CPG will subscribe to 60 percent great milestone today –the signing of trading operations to include Mitsubishi Corporation (Manila) projects through a new company was and Mitsubishi to 40 percent of the an agreement to form a joint venture investments and business management a brought about by the success of authorized capital stock equivalent to company for affordable housing. This in diverse fields including natural Century’s and Mitsubishi’s initial joint P5 billion over the same 5-year horizon. is not just for one project but for a resources development, manufacturing venture project, PHirst Park Homes long-term relationship that will make of industrial goods, retail, new energy, Tanza in Tanza, Cavite, a 26-hectare In announcing the new venture, significant contributions in addressing infrastructure, finance and new project that has a total of 3,000 units in Chairman Antonio said that the the housing backlog in the Philippines,” technology-related businesses. the P1 to 3 million per unit price range. partnership comes with great benefits, said Mitsubishi Corporation General including a broad scope to grow the Manager of ASEAN Urban Development The company is looking to launch business. Department Hidetoshi Suzuki projects initially in the CALABARZON and Central Luzon regions. Once it

50 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 51 RESIDENTIAL PROPERTIES NO. OF BUILDINGS PROJECT LOCATION DEVELOPER GFA (SQ.M.) 1 Astoria Plaza Condominium Millennium Properties & Brokerage 53,767 4 Acqua Private Residences Mandaluyong Century Limitless Corporation 52,821 6 Azure Urban Resort Residences Paranaque Century Limitless Corporation 125,216 1 Bel-Air Soho Condominium Makati Meridien East Realty & Development Corp. 9,468 1 BSA Suites Condominium Makati ASB Development Corp. 22,925 1 Commonwealth Residences Quezon City Century Limitless Corporation 136,896 2 Essensa East Forbes Taguig Meridien East Realty & Development Corp. 115,00 30 years of professional property management services 2 Golden Empire Tower Manila Moldex Land Holdings 129,514 1 Grand Soho Makati Condominium Makati Century Properties, Inc. 29,628 Through our subsidiary Century CPMI also received its re-certification 1 Knightsbridge Condominium Makati Century City Development Corp. 43,414 Properties Management, Inc., (CPMI), for ISO 9001:2015 Quality Management 1 Le Triomphe Condominium Makati Meridien East Realty & Development Corp. 20,239 CPG engages in a wide range of System, a testament to its continuous 1 Paragon Plaza Mandaluyong Fil Estate Properties, Inc. 71,631 property management services, from improvement in achieving customer facilities management and auction satisfaction, cost efficiency, increased 1 Pioneer Highlands North Mandaluyong Universal Rightfield Property Holdings, Inc. 89,990 services to lease and secondary sales. productivity, consistency in the 2 Skyway Twin Towers Pasig Amberland Corporation 95,417 Through CPMI, the company endeavors delivery of service, and increased 1 South of Market Condominium Taguig Meridien East Realty & Development Corp. 62,246 to ensure the properties it manages competitiveness. 1 The Gramercy Residences Makati Century City Development Corp. 121,595 maintain and improve their asset value, 1 The Milano Residences Makati Century City Development Corp. 49,543 and are safe and secure. In the same year alone, CPMI conducted 1 The Trump Tower Makati Century City Development Corp. 42,165 78 safety and security trainings across 1 Tiffany Place Condominium Makati River Oaks Realty Corporation 24,702 CPMI registered revenues of Php395.46 all its properties covering rescue million in 2018, a 12% increase from operations, disaster preparedness drills, 1 Two Lafayette Square Makati Megaworld Properties & Holdings, Inc. 17,189 Php352.97 million in 2017, mainly from occupational first aid and CPR/AED, 1 West of Ayala Condominium Makati Meridien East Realty & Development Corp. 57,752 the additional properties that came in, investigation, unarmed defense, and 32 TOTAL 1,371,117 including three more BPI buildings and building safety and security. Trainings newly-completed CPGI projects. are conducted every six months and each detachment isolates the greatest COMMERCIAL PROPERTIES In total, CPMI manages 46 projects skill requirements of their respective NO. OF as of December 31, 2018 with 2.58 properties and exercises intensively in million sq.m of GFA (with parking). Of these techniques. BUILDINGS PROJECT LOCATION DEVELOPER GFA (SQ.M.) this, 65 percent of the projects CPMI 1 139 Corporate Center Makati Antel Realty & Development Corporation 24,426 manages were developed by third Physical fitness trainings are conducted Special Tactics Action Group. Further, 1 88 Corporate Condominium Makati Belgen Realty Development, Inc. 37,677 parties. Notable third-party developed year-round to develop agility, earthquake drills are conducted twice 1 AvecShares Asia, Inc. Taguig Avecshares Asia, Inc. 12,232 projects under management include strength and endurance apart from a year on average in coordination with 1 Asian Century Center Taguig Asian Carmakers Corp. the Asian Development Bank in Ortigas, teamwork and sportsmanship. These the police and local government units, 1 Century City Mall Makati Century City Development Corp. 52,233 One Corporate Center in Ortigas, BPI are conducted weekly, monthly and and property management officers 1 Centuria Medical Makati Makati Centuria Medical Development Corp. 45,103 Buendia Center and Pacific Star Building semi-annually. Emergency Response are extensively trained on what to do in Makati City and Philippine National Teams per property periodically fulfill before, during, and after emergencies. 4 BPI Makati Offices Makati Bank of the Philippine Islands 61,262 Bank Financial Center in Pasay City. timed runs in their assigned rescue gear, 1 Innove Plaza Condominium Cebu Prosperity Properties & Management Corp. 12,031 ascending from the lowest basement CPMI’s safety and security teams have 1 Medical Plaza Ortigas Pasig Meridien Property Ventures, Inc. 34,642 The Company manages both residential level to the roof deck of the property also earned awards this year, including 1 One Corporate Center Ortigas Pasig Amberland Croporation 117,799 and commercial properties. The and back. event championships in four categories 1 One Corporate Plaza Makati Inchport Realty Croporation 12,034 following table (see opposite page) sets at the “Ten-in-One National Fire 1 One Magnificent Mile Condominium Pasig Meridien Far East Properties 23,105 forth information regarding residential All CPMI-managed buildings begin with Brigade Competitions hosted by the 1 One Condominium Pasig Meridien Far East Properties 64,577 properties under our management. emergency preparedness planning Safety Organization of the Philippines, and trainings each year where first the Department of Interior and Local 1 Pacific Star Building Makati Penta Pacific Realty Corporation 95,302 For the year 2018, CPMI conducted staff responders are grouped as Floor Government, and the Armed Forces of 1 Prestige Tower Condominium Pasig Amberland Corporation 58,698 trainings to improve its operational Brigade and Fire Brigade teams. To the Philippines. 1 Singapore Embassy Taguig Singapore Embassy 4,900 readiness in the areas of customer address more extreme emergencies, 1 Solar Century Tower Makati Solar Entertainment Corporation 5,265 service, security and safety, and the CPMI has capabilities to transform 1 Union Bank Plaza Pasig Union Bank Plaza 76,893 implementation of the Data Privacy Act. its Building Fire Brigade Team into a 21 TOTAL 738,179

52 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 53 OUR PROJECTS CENTURY CITY, MAKATI

Century City is an exclusive commercial center and enclave of luxury residential towers located in Poblacion, Makati City. It is home to a significant number of skyscrapers, including the Gramercy Residences, Knightsbridge Residences, The Milano Residences interior design by Versace Home, Trump Tower Philippines, Century Spire interior design by Armani Casa, as well as the cutting-edge outpatient facility Centuria Medical Makati, popular food and shopping destination Century City Mall, and the soon-to-open Century Diamond Tower. CENTURY CITY, MAKATI THE GRAMERCY RESIDENCES Completed 2012 • 1,432 units • 121,595 sq.m. GFA

58 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 59 CENTURY CITY, MAKATI THE KNIGHTSBRIDGE RESIDENCES Completed 2013 • 1,329 units • 87,717 sq.m. GFA

60 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 61 CENTURY CITY, MAKATI THE MILANO RESIDENCES Completed 2016 • 1,329 units • 87,717 sq.m. GFA

62 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 63 CENTURY CITY, MAKATI TRUMP TOWER Completed 2017 • 267 units • 55,504 sq.m. GFA

64 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 65 CENTURY CITY, MAKATI CENTURY SPIRE Under construction • 248 office units • 389 residential units

66 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 67 CENTURY CITY, MAKATI CENTURY CITY MALL Completed 2013 • 52,233 sq.m. GFA

68 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 69 CENTURY CITY, MAKATI CENTURY DIAMOND TOWER For completion 2019 • 63,101.35 sq.m. GFA

70 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 71 CENTURY CITY, MAKATI CENTURIA MEDICAL MAKATI Completed 2015 • 707 medical offices • 74,103 sq.m. GFA

72 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 73 ASIAN CENTURY CENTER BONIFACIO GLOBAL CITY, TAGUIG Completed 2018 • 56,284 sq.m. GFA

74 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 75 AZURE URBAN RESORT RESIDENCES, PARAÑAQUE CITY

The Azure Urban Resort Residences is a 9-tower tropical-inspired residential community in Parañaque City that features the country’s first man-made beach and the world-renowned Paris Beach Club. With a wide range of summer fun amenities, including gardens, a lap pool with cascading waterfalls, kiddie water slide, poolside bar, beach volleyball area and more, Azure Urban Resort Residences is a beach retreat in the middle of the city. AZURE URBAN RESORT RESIDENCES Completed 4,504 units as of 2018 • 283,208 sq.m. GFA

78 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 79 THE RESIDENCES AT COMMONWEALTH, QUEZON CITY

The Residences at Commonwealth by Century is an expansive, 8-tower residential development in Quezon City. Each building pays tribute to the incline of the existing terrain, following a sloping pattern of ascending height. Their distinctive, undulating facades are inspired by the land’s natural topographical lines; behind them are unique and generous balcony spaces that let you look over the gardens and amenities below or the cityscapes on the other side. THE RESIDENCES AT COMMONWEALTH COMPLETED 1,052 UNITS AS OF 2018 • 73,630 SQ.M. GFA

82 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 83 ACQUA PRIVATE RESIDENCES, MANDALUYONG CITY

Completed 2,983 units as of 2018 • 188,139 sq.m. GFA

Acqua Private Residences is a six-tower master-planned development whose lush, tropical rainforest-infused design brings nature’s breathtaking water features and flourishing foliage into an urban location. An exclusive country club by the water called The Pebble is being enjoyed by residents as a private amenity area. The towers are named after world-famous waterfalls like Niagara, Iguazu, and Dettifoss, and include the branded Acqua Livingstone interior design by MissoniHome, Acqua Iguazu YOO inspired by Starck, and Novotel Suites Manila. These towers lavish you with private uninterrupted views of the dazzling Makati skyscrapers across the bridge, the vibrant city skyline to the North, and the tranquil water down below. THE PEBBLE AT ACQUA

86 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 87 ACQUA LIVINGSTONE INTERIOR DESIGN BY MISSONIHOME

88 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 89 ACQUA IGUAZU YOO INSPIRED BY STARCK

90 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 91 NOVOTEL SUITES MANILA

92 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 93 CANYON RANCH Carmona, Cavite 3 phases • 13,001 units • 962,563 sq.m. GFA

94 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 95 BATULAO ARTSCAPES , Batangas

96 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 97 PHIRST PARK HOMES Launched as of 2018: 3 projects • 64 hectares • 6, 385 units • Tanza, Cavite • Lipa, Batangas • San Pablo, Laguna

98 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 99 AZURE NORTH San Fernando, Pampanga 3 towers under construction • 2,433 units

100 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 101 OPERATIONAL SUSTAINABILITY & CORPORATE SOCIAL RESPONSIBILITY OPERATIONAL SUSTAINABILITY & CORPORATE SOCIAL RESPONSIBILITY

Century Properties Group commits itself to the development and building of innovative and life-enhancing real-estate projects for global citizens. To such ends, we effectively engage and build-up the organization’s resources to deliver products and services that delight and satisfy our customers.

We ensure that mechanisms are in We aspire to give satisfactory returns place to enable sustained growth and on our shareholders’ investment. We innovation, and that our systems and faithfully comply with all applicable processes are aligned to respond to the statutory and regulatory requirements increasing and ever-changing demands and commit to the ideals of corporate of the real estate industry. social responsibility in the conduct of our business. Our employees are being empowered to take proactive roles with an active learning and development plan, regular training opportunities and real career progression to ensure the continuity of our vision.

104 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 105 OPERATIONAL SUSTAINABILITY & CORPORATE SOCIAL RESPONSIBILITY SUSTAINABILITY IN PROPERTY DEVELOPMENT

As we turn into the next exciting already begun practicing some of these City, Makati, we have set the Leadership chapter for Century Properties principles into our new projects, as in Energy and Environmental Design Group, we also bring with us a solid follows: (LEED) green building rating system as commitment to develop sustainably our minimum core design requirement. WHAT IS LEED? and with utmost care for the planet Setting a green core design All three buildings have LEED Pre- LEED (Leadership in Energy and and its people. Our thrust towards requirement for each project. Certification as Certified for Core Environmental Design) is an responsible development is anchored Specifically for our new-generation and Shell Development Level and internationally recognized green on the principles of setting a minimum office buildings, such as the newly- are awaiting their final score their building certification system, providing green core design requirement for each opened Asian Century Center in respective targeted silver status upon third-party verification that a building project, putting disaster mitigation Bonifacio Global City and the upcoming completion and full operations. or community was designed and built measures in place, and operationalizing Century Diamond Tower and Century using strategies aimed at improving sustainable living practices. We have Spire which are both located in Century performance across all the metrics that matter most: energy savings, water efficiency, CO2 emissions reduction, improved indoor environmental quality, OFFICE PROJECT IN FOCUS: CENTURY DIAMOND TOWER and stewardship of resources and TYPE OF PROJECT : Office building for lease sensitivity to their impacts. DEVELOPER : Century City Development II Corporation LOCATION : Century City, Makati Developed by the U.S. Green Building ARCHITECT : G2 Development Planning and Architect Leo Parinas of LPPA Design Group Council (USGBC), LEED provides COMPLETION DATE : 2019 building owners and operators a NET LEASABLE AREA : 58,574 square meters concise framework for identifying and AVERAGE FLOOR PLATE : 2,237.52 square meters implementing practical and measurable NUMBER OF FLOORS : 41 physical floors (5 below ground; 36 above ground) green building design, construction, OFFICE FLOORS : 27 floors operations and maintenance solutions. PARKING FLOORS : 11 (5 levels basement; 6 levels above grade parking from 2F-8F) PARKING SLOTS : 652 parking slots AIR-CONDITIONING : Variable Refrigerant Flow (VRF) BACKUP POWER : 100% with redundancy ELEVATORS : 1 Service Lift, 6 Passenger Lifts (Low Zone), 6 Passenger Lifts (Mid Zone) 5 Passenger Lifts (High Zone), 2 Car Park Access Lifts TELCO PROVIDER : Multiple Telco Providers FLOOR TO CEILING HEIGHT : 2.70 meters HANDOVER CONDITION : Warm Shell RETAIL FLOORS : Ground and Mezzanine Levels SPECIAL FEATURES : PEZA accredited; follows the core and shell rating system of the Leadership in Energy and Environmental Design (LEED)

106 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 107 OPERATIONAL SUSTAINABILITY & CORPORATE SOCIAL RESPONSIBILITY

CENTURY DIAMOND TOWER GREEN BUILDING ATTRIBUTES

Green Vehicle Parking Material Recovery Facility Minimum Energy Performance • 5% of the total parking spaces of • CDT provided a Material Recovery • CDT is designed to reduce energy Universal Design Compliance CDT are reserved for green vehicles. Facility (MRF) with dedicated spaces use through its high-performance Century Diamond Tower is accessible These parking spaces are located at for paper, plastic, glass, metal, building envelope, energy efficient to persons with disability (PWDs). Main 2nd level near the elevators for easy furniture and hazardous waste. The lighting and HVAC equipment. drop-off, main entrances and elevators access to the building facilities. It MRF is located at the 2nd level of were designed considering wheelchair promotes the use of green vehicles the building. This helps in diverting Heat Island Effect access. Each floor also has three and aims to reduce greenhouse gas recyclable waste that is generated by • CDT helps in reducing heat island washrooms: emissions caused by transportation. building occupants from landfills. through the use of roofing materials with high Solar Reflectance Index Male, Female and separate for Persons Water Efficient Plumbing Fixtures No Smoking Building (SRI) value. with Disability (PWD). • CDT’s water usage was reduced by • CDT prohibits smoking within the 50% through installation of water building and its property to fully Daylight and Views efficient plumbing fixtures, which eliminate health risks associated with • CDT follows an open plan layout simply supplies the fixtures with environmental tobacco smoke. “No where regularly occupied spaces will enough water to serve its purpose. Smoking” signage will be installed at be located at the perimeter of the the entrances of the building. building to provide ample daylight No ozone depleting and low global and views to the building occupants. warming impact refrigerants Low-emitting materials Also, office partitions to be used are • CDT’s building systems have no • CDT uses paints, coatings, adhesive low or glass partition to maintain Chlorofluorocarbons (CFCs) based and sealants with low volatile organic visual connection to the outside. refrigerants that can damage compound (VOC) to minimize indoor Earth’s protective ozone layer. CDT’s air contamination to benefit the Universal Design Compliance mechanical equipment uses R-410A health and comfort of building users. • Century Diamond Tower is accessible refrigerants that has no impact on to persons with disability (PWDs). ozone layer and low impact on Indoor Chemical and Pollutant Main drop-off, main entrances and global warming. Source Control elevators were designed considering • CDT provides better indoor air wheelchair access. Each floor also has quality through installation of dirt three washrooms: Male, Female and catchment at all entryways of the separate for Persons with Disability building and through installation of (PWD). high efficiency filters (MERV13) to all fresh air fans.

TURN OF THE CENTURY 109 OPERATIONAL SUSTAINABILITY & CORPORATE SOCIAL RESPONSIBILITY SUSTAINABILITY IN PROPERTY DEVELOPMENT

OFFICE PROJECT IN FOCUS: ASIAN CENTURY CENTER

PROJECT NAME : Asian Century Center TYPE OF PROJECT : Commercial building with office and retail spaces for lease DEVELOPER : Asian Carmakers Corporation in partnership with Century Properties Group LOCATION : Bonifacio Global City, 27th Street corner 3rd Avenue, Bonifacio Global City, Taguig COMPLETION DATE : 2018 NET LEASABLE AREA : 29,628 square meters TYPICAL FLOOR PLATE : 2,219.92 (14F & 19F) to 2,358.20 square meters (10F & 17F); some floors may be subdivided into quadrants NUMBER OF FLOORS : 21 physical floors (1 basement; 20 above ground) PARKING FLOORS : 6 (Basement 1, 2F to 6F) PARKING SLOTS : 433 AIR-CONDITIONING : Variable Refrigerant Flow (VRF) BACKUP POWER : 100% N+1 ELEVATORS : 8 Passenger Elevators, 1 Service Lift TELCO PROVIDER : Multiple Telco Providers (Globe, PLDT, Converge) FLOOR TO CEILING HEIGHT : 2.70 meters; 3.90 meters slab to slab HANDOVER CONDITION : Warm Shell SPECIAL FEATURES : Helipad provision; PEZA accredited; pre-certified for the core and shell rating system of the Leadership in Energy and Environmental Design (LEED) LEASING MANAGER : Leechiu Property Consultants TENANT MIX : IT, BPO, KPO, E-commerce

110 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 111 OPERATIONAL SUSTAINABILITY & CORPORATE SOCIAL RESPONSIBILITY

ASIAN CENTURY CENTER GREEN BUILDING ATTRIBUTES

Asian Century Centre offers large, • ACC’s building systems have no • ACC provides better indoor air flexible open plan space in the heart Chlorofluorocarbons (CFCs) based quality through installation of dirt of Bonifacio Global City. Light shelves refrigerants that can damage catchment at all entryways of the incorporated above the windows Earth’s protective ozone layer. ACC’s building and through installation of provide shade while increasing daylight mechanical equipment uses R-410A high efficiency filters (MERV13) to all penetration. Skycourts highlight the refrigerants that has no impact on fresh air fans. entrance corner and public plaza at ozone layer and low impact on ground level, providing social spaces global warming. Minimum Energy Performance which also serve as beacons for the • ACC is designed to reduce energy development when illuminated at Material Recovery Facility use through its high-performance night. • ACC provided a Material Recovery building envelope, energy efficient Facility (MRF) with dedicated spaces lighting, and HVAC equipment. Green Vehicle Parking for paper, plastic, glass, metal, • 5% of the total parking spaces of furniture and hazardous waste. The Heat Island Effect ACC are reserved for green vehicles. MRF is located at the Basement •ACC helps in reducing heat island These parking spaces are located at Floor of the building. This helps in effect through roofing materials with 3rd Floor near the elevators for easy diverting recyclable waste that is high Solar Reflectance Index (SRI) access to the building facilities. It generated by building occupants value. promotes the use of green vehicles from landfills. and aims to reduce greenhouse gas Daylight and Views emissions caused by transportation. No Smoking Building • ACC follows an open plan layout • ACC prohibits smoking within the where regularly occupied spaces will Bicycle Facilities building and its property to fully be located at the perimeter of the • ACC provided Bicycle Storage eliminate health risks associated with building to provide ample daylight and Shower Rooms to promote environmental tobacco smoke. “No and views to the building occupants. bicycling as an alternative to vehicle Smoking” signages are installed at Also, office partitions to be used are use and to improve public health the entrances of the building. low or glass partition to maintain by encouraging utilitarian and visual connection to the outside. recreational physical activity. Low-emitting materials • ACC uses paints, coatings, adhesive Universal Design Compliance Water Efficient Plumbing Fixtures and sealants with low volatile organic Asian Century Center is accessible to • ACC’s water usage was reduced by compound (VOC) to minimize indoor persons with disability (PWDs). Main 42% through installation of water air contamination to benefit the drop-off, main entrances, and elevators efficient plumbing fixtures, which health and comfort of building users. were designed considering wheelchair simply supplies the fixtures with access. Each floor also has three enough water to serve its purpose. Indoor Chemical and Pollutant washrooms: Source Control No ozone depleting and low global Male, Female, and separate for Persons warming impact refrigerants with Disability (PWD).

TURN OF THE CENTURY 113 IS YOUR CONDO EARTHQUAKE-READY?

• Century Properties Group condominiums follow the National Structural Code OPERATIONAL SUSTAINABILITY of the Philippines, based on the Uniform Building Code, which is the required & CORPORATE SOCIAL RESPONSIBILITY reference ion the design of tall buildings against earthquakes.

Putting disaster mitigation measures in place. Aside from giving our on-site • CPG taps professional structural engineers, architects and geotechnical experts to ensure its structures adhere to the latest building code and teams their regular emergency response trainings, we also covered the aspects employ the latest technology available to ensure the safety of its occupants. of flooding and earthquake preparedness in our project and masterplan • Aside from complying with the standards of the National Structural Code of designs. We regularly consult with technical experts, including Dr. Brian B. Tan, the Philippines, high rise condos of Century Properties employ SMRF (Special M.SC. for geotechnical assessment and our structural engineers SySquared Moment Resisting Frame) – frames in which members and joints let the building withstand forces caused by earthquakes. Associates. Flood prevention and mitigation measures have been applied to the 8-tower Century City Makati, the 6-tower Acqua Private Residences in • For its much taller high rises, Century Properties applied Performance-Based Design (PBD) methods – the gold standard for designing skyscrapers all over Mandalutong City, the 8-building Residences at Commonwealth in Quezon the world. City, and the 9-tower Azure Urban resort Residences in Paranaque City. • Regular earthquake drills are conducted across all CPG projects, in coordination with the local government, , police and authorities in CENTURY CITY, Makati – Even of the local government unit of precaution, we still added an extra disaster preparedness. if historically no uncontrollable Barangay Marcelo Green as well as the measure to protect the property from floodwater surges have been recorded city government in the construction flooding. For instance, the ground or experienced on site, we installed of a drainage system that traverses floor of all towers, amenity and retail sump pumps, which can pump out through the company property. areas were planned with an increased water into the drainage, within existing With this drainage in place, future elevation of 1.5 meters. All parking structures as well as those that have residents of Azure are not the only floors were built above ground and Operationalizing sustainable living practices. Through our yet to see construction. This mitigation ones assured of a flood-free path, but residential floors are on the 6th level property management services group, Century Properties scheme was complemented with the also all the motorists and pedestrians and up. rehabilitation of the drainage lines who use the West Service Road. Even Management Inc., we will undertake a review of our underground canals (restoration, as the construction of the Azure THE RESIDENCES policies and procedures in energy consumption, as well de-clogging, and addition of new is in full swing, the vicinity has not AT COMMONWEALTH, Quezon drainage culverts) around Valdez Street, been submerged in water during the City – For Commonwealth, we built a as waste collection and segregation in order to promote Salamanca Street and , onslaught of massive rains. This only detention tank within the development the reduction of single-use plastics and encourage re- which not only lessened the risk of proves that the area around the SLEX near the outfalls of the property to basement flooding, but also helped Bicutan Entry/Exit is a non-flood prone protect the downstream settlements use and recycling in our communities. We will undertake regulate the flow of water that may be area, given the sufficient drainage from flooding and to control the partnerships with non-government organizations, such as pumped out into the drainage line. We systems in place. discharge into the existing drainage the WorldWildlife Fund (WWF) that can teach us how to also we helped repair the drainage line system. Also, the site is properly graded at nearby San Miguel Village, where ACQUA PRIVATE RESIDENCES, such that the water runoff from the apply best practices in sustainability in the communities our drainage on Kalayaan Avenue is Mandalutong City – As the project property drains to the recommended we serve. also connected. Hence, we do not sits in front of the historic Pasig River, outfall locations. experience rising waters on site during we conducted an extensive flood the onslaught of the heavy rains. risk analysis for the site during the project’s planning stages despite the AZURE URBAN RESORT fact that the location of the site makes RESIDENCES, Paranaque – Century it less vulnerable to flood since it has Properties sought the cooperation open access to the sea. As an added

114 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 115 OPERATIONAL SUSTAINABILITY & CORPORATE SOCIAL RESPONSIBILITY

(b) Rate of new employee hires in 2018 OPERATIONAL SUSTAINABILITY: • Rate of New Hires = 19% ECONOMIC CONTRIBUTION (c) Total # of Employee Turnover 2018

We are prudent in spending and constantly endeavor to strike a healthy balance JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL between ensuring we deliver to higher standards while keeping costs at a minimum CLC 6 12 3 7 2 6 3 5 1 5 6 2 58 to deliver satisfactory returns. CCDC 2 7 1 2 2 1 1 1 17 2018 2017 CISI 1 1 4 1 1 8 Direct Economic Value Generated (in Philippines Pesos) CMDC 1 1 Revenues 11,270,534,540 7,506,849,411 PPHI 1 1 2 1 1 1 7 Economic Value Distributed CPMI 4 6 9 6 8 11 3 7 5 8 6 6 79 Operating Costs 8,626,161,185 5,590,899,024 Total 13 25 13 15 13 25 8 14 7 15 13 9 170 Employee Wages and Benefits 629,488,457 583,582,166 Payments to Providers of Capital 199,999,999 205,065,834 Payments to Government 477,746,320 537,324,563 Benefits Parental Leaves • Communication Allowance Total employees who took parental Economic Value Retained 1,337,138,579 589,977,824 • Car Assignment for Key Officers leave for the period • Group Life Insurance Coverage 31 employees took Maternity Leave & Estimated Labor Count 4,319 3,417 • Healthcare Coverage Paternity Leave in 2018 • Rice Subsidy EMPLOYEE DEVELOPMENT AND ENGAGEMENT • Retirement (self-funded) Total employees who returned to We value our employees as a vital resource and lifeblood of the organization. We • Service Incentive Leave work after parental leave make sure they are taken good care of, their performance is monitored, and training • Variable Performance Bonuses 30 employees returned after their and assistance are provided to promote their growth and development in the • 13th Month Pay Maternity Leave and Parental Leave company. Employee Trainings Overall 2018 Return to Work Rate for (a) Number of employees hired in 2018 – male and female/and age range • Employee Engagement FGD male and female employees = 98% NEW HIRES 2018 • UP Law Paralegal Training Program MALE FEMALE AGE 18-24 AGE 25-34 AGE 35-44 AGE 45-54 • MCLE Compliance Seminars Employee Benefits – Performance • Data Storytelling for Business Reviews and Incentives Century Limitless Corp. (CLC) 30 35 8 42 9 6 Seminar • Performance Review Period: Every Century City Development Corp. (CCDC) 3 5 1 6 1 • Project Management in the July of current year (to cover last year Construction Industry July to June of current year) Century Integrated Sales, Inc. (CISI) 6 4 1 1 • Corporate Governance Training for • Key Result Areas: (1) Financial Centuria Medical Development Corp. (CMDC) 1 3 1 2 1 Directors and Senior Management Efficiency (2) Operations PHirst Park Homes, Inc. (PPHI) 17 13 4 20 5 1 • Internal Audit Conference Effectiveness (3) Organizational • ISO Training Development (4) Customer Service Century Properties Management, Inc. (CPMI) 60 40 14 50 25 11 • Content Conference • 2018 Average Performance Bonus: 1 Total 111 102 32 121 41 19 • 25th National Public Relations month gross pay equivalent Seminar • 2018 Average Salary Increase: 6% 213 213 • Digicon 2018 • National Convention for United Architects of the Philippines

116 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 117 OPERATIONAL SUSTAINABILITY & CORPORATE SOCIAL RESPONSIBILITY

CORPORATE SOCIAL RESPONSIBILITY

Century Properties Group’s corporate social responsibility for 2018 was done in partnership with Ms. Gina Lopez’s ILOVE Foundation (Investments in Loving Organizations for Village Economies) as well as the ABS CBN Foundation for the eco-tourism documentary series, G Diaries.

With CPG Chairman Jose E.B. Antonio 2. The Lake Sebu Indigenous Women 8. Got Heart Foundation to set up an active board member of I LOVE Weavers Association, Inc. (LASIWWAI) a School of Living Traditions and Foundation, Century poured in a total to create Agri and Mountain Tourism Laboratory for the Abelling Tribe in of Php7 million of financial support in Lake Sebu, South Cotabato San Jose, Tarlac during the period to help identify and transform marginalized communities 3. The Health Futures Foundation, Inc. Through the Quest, ILOVE Foundation in the Philippines into viable localized to create a Wellness Village for the partners such as CPG are given the economic zones. This initiative is Blaan tribe of Polomolok, South opportunity to further provide financial ongoing through ILOVE Foundation’s Cotabato and technical support to the deserving Quest for Love, a nation-wide search for organizations, with the hopes of Loving Organizations that seek to help 8 4. The Mindanao State University to promoting wide-spread social and marginalized communities become self- create an Eco-tourism and Fishing environmental development. sustaining enterprises in agro-forestry, Village for 100 Badjao fisher folk in fisheries, or eco-tourism. Simunul, Tawi Tawi In addition, CPG conducted bloodletting drives in partnership From a total of 128 entries from 40 5. The Yellow Boat of Hope Foundation with the Philippine Red Cross in its different areas all over the country, 16 to create an ecotourism and fishing offices at the Pacific Star Building and candidates were chosen based on the village for 71 families in Sta. Cruz, its outpatient center, Centuria Medical track record of the organizations and its Zamboanga Makati, for the benefit of the most leaders, and the potential impact of the vulnerable patients across the country proposed intervention on the partner 6. The University of the Cordilleras to who need urgent blood transfusion. Community. The shortlist was further develop Mountain Tourism for 18,000 narrowed down to the final 8 Loving farmers and tour guides in Tublay, Organizations: Benguet (adopted community by CPG) 1. The Aggrupation of Advocates for Environmental Protection (AGAP) to 7. The Busikong Greenland Multi- create Mountain Tourism and an Eco- Purpose Cooperative to develop tourism site in Bulusan, Sorsogon Agri-Tourism for 225 organic farmers in Upi, Maguindanao

118 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 119 THE LEADERSHIP TEAM THE CPG BOARD OF DIRECTORS

Behind Century Properties Group, Inc. is a committed team of remarkably accomplished and talented people who are committed to realize the company’s goals as guided by its vision, mission and values.

The Directors of the Company are elected at the regular annual stockholders’ meeting. They hold office for a term of one (1) year until the next succeeding annual meeting and until their respective successors have been elected and qualified. The executive officers hold office until their respective successors have been elected and qualified.

There are no changes in the composition of the Board from December 31, 2017 to December 31, 2018.

All the directors and members of the senior management of the Company possess a high degree of integrity and character and are fully capable and able to perform their duties as directors and members of senior management, respectively.

122 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 123 Ambassador Jose E.B. Antonio, 72 years old, Filipino, is one of the founders and Chairman of the Company and its subsidiaries. He graduated cum laude from San Beda College, Manila in 1966 with a Bachelor’s Degree in Commercial Science (major in Marketing) and received a Masters Degree in Business Management in 1968 from Ateneo de Manila’s Graduate School of Business. Chairman Antonio also graduated from Harvard University’s Owner/ President Management Program in 2003. Chairman Antonio served as the Philippines Special Envoy for Trade and Economics to the People’s Republic of China in 2005 and is currently the Chairman of Century Asia Corporation, Prestige Cars, Inc. and Philtranco Service Enterprises. He is also the founder and Chairman of the Philippine-China Business Council Inc. In addition, he serves as the Vice Chairman of Penta Pacific Realty Corporation and Subic Air Charter, Inc. Mr. Antonio has also been duly appointed by President Rodrigo R. Duterte as the Philippines’ special envoy to the United States, effective October 28, 2016. His mission is to enhance business ties and strengthen the economic affairs between the two countries.

124 Century Properties Group Annual Report 2018 Mr. John Victor R. Antonio, 46 years old, Filipino, is Co-Chief Operating Officer and a Managing Director of the Company. He has been with the Company for 25 years and is involved in spearheading the Company’s flagship projects – including The Gramercy Residences (the tallest residential building in the Philippines when it was completed in 2012), and The Azure Urban Resort Residences (the only in-city development with a private man-made beach).

He graduated Magna Cum Laude with a Bachelor of Science Degree in Economics (major in Marketing) from the University of Pennsylvania’s Wharton School in 1993 and received his Master’s Degree in Business Administration from the Wharton School in 2003.

TURN OF THE CENTURY 127 Mr. Jose Marco R. Antonio, 44 years old, Filipino, is Co-Chief Operating Officer and a Managing Director of the Company. He has been with the Company for 21 years and is involved in managing projects in the Company’s middle income and affordable product lines, including Canyon Ranch, Knightsbridge Residences and Acqua Private Residences. Prior to joining CPG, he worked at Blackstone Real Estate Partners as a financial analyst. He graduated summa cum laude with a Bachelor’s Degree in Economics (dual major in Finance and Entrepreneurial Management) from the University of Pennsylvania’s Wharton School in 1995 and received his Master’s Degree in Business Administration from the Wharton School in 2004.

128 Century Properties Group Annual Report 2018 Mr. Jose Roberto R. Antonio, 42 years old, Filipino, He is the Founder and CEO of Revolution is a Managing Director of the Company. He is Precrafted, the first and only proptech unicorn involved in managing projects in the Company’s in Southeast Asia and the only billion-dollar luxury product line, where he conceived and startup in the Philippines. Revolution is a global spearheaded branded developments with the supplier of traditional and prefabricated homes Trump Organization, Armani Casa, Versace Home, and structures with footprints in (thirty-one) Philippe Starck, Missoni Home, and Paris Hilton. 31 countries within Asia, Middle East, Europe, North and South America, and the Caribbean. He graduated Omicron Delta Epsilon for outstanding GPA with a Bachelor’s Degree In May 2018, he was named “Real Estate in Economics from Northwestern University Personality of the Year” by PropertyGuru. In the and obtained his Masters Degree in Business same year, Mr. Antonio was also cited in the 2018 Administration from Stanford University. He Mavericks Report by BuiltWorlds as one of the “25 joined the Company in 2009 after spearheading Pioneers Who’ve Transformed the Built Industry.” Antonio Development in New York City, where he had the opportunity to work with Pei Partners He has worked with more than 110 global brand and the late I.M.Pei for the luxury condominium names and celebrities, including 13 Pritzker Centurion, located on 56th Street between Prize Architects and firms such as Jean Nouvel, 5th and 6th Avenue, steps from Central Park. the late Zaha Hadid, Philip Johnson Alan Ritchie Architects, Tange Associates, Paulo Mendes Mr. Antonio is also the Founder and CEO of de Rocha, Rem Koolhaas, Tange Associates, Resident Holdings Group, a conglomerate and Christian de Portzamparc; designers and of 27 tech, real estate, branding, franchising architects Kengo Kuma, Tom Dixon, Lenny and licensing concepts, e-commerce Kravitz, and Sou Fujimoto; supermodel Helena and e-services companies. Christensen; Hollywood actress and model Kate Upton; the boxing champion and politician Manny Pacquiao, and Wallpaper magazine.

TURN OF THE CENTURY 131 Mr. Jose Carlo R. Antonio, 35 years old, Filipino, is a Managing Director and member of the Board. Prior to joining the Company in 2007, he worked in the investment banking groups of Citigroup and Goldman Sachs. He graduated magna cum laude with a Bachelor’s Degree in Economics (major in Finance) from the University of Pennsylvania’s Wharton School in 2005.

132 Century Properties Group Annual Report 2018 Mr. Ricardo P. Cuerva, 74 years old, Filipino, is a member of our Board. Mr. Cuerva is the President and owner of Century Project Management and Construction Corporation, which oversees the construction of our vertical developments. Mr. Cuerva was a co-founder of Meridien Group of Companies and served as Meridien’s president from 1988 to 1996. He also currently serves as a member of the Rotary Club of Makati City. Mr. Cuerva graduated from San Beda College in 1961 with a Bachelor of Science Degree in Business Administration and obtained his Master’s Degree in Business Administration from Ateneo De Manila in 1971.

TURN OF THE CENTURY 135 Mr. Rafael G. Yaptinchay, 68 years old, Filipino, is a Managing Director of the Company and a member of our Board. Mr. Yaptinchay was a co-founder of Meridien and served as Meridien’s president from 1996 to 2009. He has previously served as the Assistant Treasurer and Head of Business Development/Corporate Planning of Philippine National Construction Corporation. Mr. Yaptinchay is a member of the Rotary Club of Ortigas and the Association of Asian Manager, Inc. Mr. Yaptinchay graduated from Ateneo de Manila University in 1971 with a Bachelor’s Degree (major in Economics) and received his Master’s Degree in Business Administration from Asian Institute of Management in 1974.

136 Century Properties Group Annual Report 2018 Ambassador Jose L. Cuisia, Jr., 72 years old, Filipino citizen, is the former Ambassador Extraordinary and Plenipotentiary of the Republic of the Philippines to the United States. Ambassador Cuisia is also well- respected figure in Philippine business, with over 32 years in financial services, most recently as the President & CEO of the largest and most profitable non-bank financial institution on the Philippines. He serves on the boards of many of the Philippines’ most important private and listed companies, and has shared his expertise as Trustee on various academic institutions and nongovernment organizations espousing good governance and corporate social responsibility, including the Asian Institute of Management. Ambassador Cuisia has over 10 years of experience in public service, having served Filipinos as the Governor of the Central Bank of the Philippines and Chairman of its Monetary Board as well as President and CEO of the Philippine Social Security System in the 1980s and 1990s. At the Central Bank, Ambassador Cuisia oversaw the liberalization of foreign exchange controls, resulting in, among others, the entry of more substantial foreign direct investment that strengthened the Philippine Peso and the country’s foreign exchange reserves. The Ambassador also led the efforts in establishing what is now the Bangko Sentral ng Pilipinas, allowing it to become a more effective guardian of monetary policy and ensuring the stability of the banking system. Amb. Cuisia also serves as Director to various companies namely: Investment & Capital Corporation of the Philippines, Asian Institute of Management, Phinma Corporation, SM Prime Holdings Inc., Philippine Investment Management, Inc.. He likewise serves as an Independent Director of Manila Water Company, Inc.

TURN OF THE CENTURY 139 Mr. Stephen T. CuUnjieng, 60 years old, Filipino Citizen, is a prominent investment banker and currently serves as an Independent Director of First Philippine Holdings Corporation and previously Aboitiz Equity Ventures, Inc. He has long and extensive experience in investment banking with several major financial institutions including Evercore Partners, Inc. where he is the Chairman of Evercore Asia Limited, Macquarie Capital, Merrill Lynch and Salomon Brothers. He is an advisor to a number of Asia’s most prominent companies like , Samsung Electronics, and Tiger Airways, among others. He finished his undergraduate and law degree from Ateneo de Manila University and later on earned his MBA degree from the Wharton School of Business at the University of Pennsylvania.

140 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 141 Mr. Carlos C. Ejercito, 73 years old, Filipino, is the President and Chief Executive Officer of Mount Grace Hospitals, Inc., Chairman and Chief Executive Officer of Forum Cebu Coal Corporation, and Chairman of Northern Access Mining, Inc. He is a Board Member of thirteen (13) hospitals, including Medical Center Manila, VR Potenciano Medical Center, Tagaytay Medical Center, Pinehurst Medical Services Inc., Grace General Hospital, Healthserv Medical Center, Lorma Medical Center, Mary Mediatrix Medical Center, Silvermed Corporation, and Capitol Medical Center. He was formerly the Chairman of the Board of United Coconut Planters Bank, and a former Director of the National Grid Corporation of the Philippines. He was also the President and Chief Executive Officer of United Laboratories, Inc., Unilab Group of Companies, Univet Agricultural Products, Inc., and Greenfield Development Corporation, as well as the Vice President and Senior Country Operation Officer of Citibank, NA. Prior to Citibank, Mr. Ejercito was a Systems Engineer in IBM Philippines, and Accounting Unit Head in Procter & Gamble Philippines, Inc. He was a member of the Board of Governors of the Management Association of the Philippines. Mr. Ejercito graduated cum laude from the University of the East with a degree in Bachelor of Science in Business Administration. He also completed the Management Development Program of the Harvard Business School in 1983, and has completed the coursework for Master’s in Business Administration at the Ateneo Graduate School of Business. Mr. Ejercito is a certified public accountant. As of date, he serves as an Independent Director at Aboitiz Power Corporation, Bloomberry Resorts Corporation and Monte Oro Resources and Energy Corporation.

TURN OF THE CENTURY 143 BOARD OF ADMINISTRATIVE OFFICERS From left to right.

Atty. Danny E. Bunyi, 54 years old, Filipino, is the Corporate Secretary of the Company. He is likewise a Partner at Divina Law Offices and a lecturer at John Gokongwei School of Management in Ateneo de Manila University, and at the Trust Institute Foundation of the Philippines. He was the Senior Vice President and Corporate Secretary of the Development Bank of the Philippines and the Chief Compliance Officer and Legal Services Group Head of Robinsons Bank. He was also the Legal Counsel for Consumer Banking of Standard Chartered Bank (Manila Office) and the Head of the Legal Advisory Division of the Philippine Commercial International Bank. He completed the Finance for Senior Executives Program in the Asian Institute of Management as well as the course on Trust Operations and Investment Management conducted by the Trust Institute Foundation of the Philippines. He obtained his law degree at the Ateneo de Manila University, with a Bachelor’s degree in Business Management, major in Legal Management from the same university. Atty. Bunyi has extensive work experience in the field of banking and finance, trust banking and investment management, and corporate and special projects.

Atty. lsabelita Ching-Sales, 39 years old, serves as the Company’s Chief Information Officer. Atty. Ching-Sales was the Chief Legal Counsel, Head for Credit Support, Chief Information Officer and Corporate Secretary of Asiatrust Development Bank where she worked for 5 years. She likewise worked as Head for Operations of China Banking Corporation’s Acquired Assets Division. She graduated from the University of Santo Tomas with a Bachelor’s Degree in Legal Management and obtained her degree in Bachelor of Laws at San Sebastian College Recoletos Manila, Institute of Law and San Beda College of Law.

Mr. Carlos Benedict K. Rivilla IV, 47 years old, Filipino, is the Vice-President for Corporate Affairs of the Company. As part of his experience in the business sector, he served as Corporate Compliance Officer and Vice-President for Finance in a corporation engaged in mass media for four years in Cebu City and also previously handled Corporate Affairs for the Company and served as Director and Corporate Secretary of various businesses in Makati City. He joined the Company in 2007. Mr. Rivilla is a graduate of University of San Jose Recoletos. Mr. Rivilla was appointed Assistant Corporate Secretary on August 17, 2011.

144 Century Properties Group Annual Report 2018 SENIOR MANAGEMENT TEAM From left to right.

Mr. Gerry Joseph Albert L. Ilagan, 39 years old, Filipino, is the Mr. Gerardo A. Morales, 57 years old, Filipino, serves as Executive Vice-President for Century Worldwide Services and the Company’s Treasurer. He was the former President of Sales Management Operations of the Company. In October Optimum Development Bank. He has been involved in 2015, he was appointed as fulltime group head of Century varying capacities with several banks (Planters Development World Sales Operations. He graduated with academic Bank, Union Bank of the Philippines and Far East Bank) for distinction from San Beda College with a Bachelor’s Degree more than 25 years. He graduated from Ateneo de Manila in Human Resources Development and Philosophy. He University in 1981 with a Bachelor of Science Degree, Major in also attended De La Salle College of St. Benilde’s School of Business Management. Professional and Continuing Education where he received a diploma in Organizational Development and a diploma Mr. Domie S. Eduvane, 54 years old, Filipino, is the Senior in Human Resources. He is a licensed Real Estate Broker Vice-President for Legal and Corporate Affairs of the with more than 10 years of human resources and sales Company. He graduated magna cum laude from Far management experience gained from several multinational Eastern University, Manila with a Bachelor of Arts Degree and Philippine companies. Mr. Ilagan also worked with Sun in Economics and obtained his law degree from San Beda Microsystems Philippines Inc. and Crown Asia Properties Inc. College of Law, Manila in 1994. Prior to joining the Company, prior to joining the Company. he served as the Vice-President for Legal and Corporate Affairs and Human Resources for Empire East Properties, Inc., Mr. Ponciano S. Carreon, Jr., 45 years old, is the Chief Financial an affiliate of Megaworld Corporation. He also worked as Officer and Head for Investor Relations. Prior to joining Court Attorney with the Court of Appeals, Manila and was an CPGI, he served as Chief Finance Officer of Landco Pacific Associate with Bengzon Zarraga Cudala Liwanag & Jimenez Corporation, Chief Finance Officer of Arthaland Corporation, Law Offices as well as a Partner of Yrreverre Rondario & Assistant Vice President of Controllership at SM Development Associates Law Office. Corporation and Controller of Crown Asia Properties, Inc., a Vista Land subsidiary, and as member of the Board of Mr. Gerardo R. Mina, 54 years old, Filipino, is the Vice Directors of Club Punta Fuego Inc., Fuego Land Corporation, President for Property Management of the Company. He and Fuego Development Corporation. He also brings with graduated from Adamson University with the degree of him solid banking experience having served as a bank Bachelor of Science in Civil Engineering and earned units in controller, audit head and examiner. He is an Ateneo-BAP MBA from Ateneo Graduate School of Business. He was with Certified Treasury Professional, a cum laude graduate of BS Century Properties Management, Inc. (CPMI), a subsidiary Accountancy degree at San Beda College and a CPA board of Century Properties Group, Inc. (CPGI) for 21 years and topnotcher. occupied senior management post in the Operations Division.

146 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 147 SENIOR MANAGEMENT TEAM From left to right.

Mr. Ritchelle T. Cordero, 38 years old, Filipino, is the Vice Mr. Ramon S. Villanueva III, 39 years old, Filipino, is the Tax President for Human Resources and Administration of the Compliance Officer of the Company. He graduated with the Company. He graduated with academic distinction from San degree of Bachelor of Science in Accountancy from Palawan Beda College, Manila in 2002 with the degree of Bachelor State University in 2002. He is the 10th placer at the Licensure of Arts in Philosophy and Human Resources Development, Examination for Certified Public Accountants in May 2005. and earned his Executive Masters in Business Administration Prior re-joining the Company, he served as the Comptroller degree from the Asian Institute of Management in 2017. of the Company for 4 years. He also served as Senior Auditor Prior to joining the Company, he was the HR Manager of for Punongbayan & Araullo. He also worked as Accounting Ayala Property Management Corporation, a subsidiary of Professor at the Palawan State University. Ayala Land Inc. He also worked as the HR Officer of DMCI Project Developers, Inc. He also served as the HR & Quality Mr. Timothy Hallett, 58 years old, British, is the Company’s Management Officer of Asiatic Development Corporation. President for the Tourism and Leisure Business Segments of He is a member of People Management Association the Company. Mr. Hallett was the former Chief Operating of the Philippines (PMAP), Philippine Society for Talent Officer of Century Properties Hospitality and former Development (PSTD), and Society for Human Resource Chairman of Century Acqua Lifestyle Corporation, has more Management (SHRM). than 30 years hospitality business experience in UK and Asia and has developed, pre-opened and operated multiple Mr. Ricky M. Celis, 50 years old, Filipino, will lead Century international hotels and golf resorts worldwide. He started Properties in capturing the vast opportunities in the his career with Europe’s leading golf and leisure operator, affordable housing segment. Prior to joining the Company, the Marriott Country Club Hotels and then was part of PGA he served as the Head for Corporate Sales of Ayala Land Golf Management in UK and Asia. His career continued Residential Business Group and President of Amaia Land (ALI with CCA International in Hong Kong where he oversaw Subsidiary). He also worked for Vista Land and Lifescapes the development of their Asian golf business and managed for 11 years where he served as Technical Services Engineer their 5-Star Club in Guangzhou, China. Prior to joining Alila and eventually the Operating Head for Camella Homes Hotels & Resorts, he was Managing Director of Palm Resort South Division. He earned his degree in Civil Engineering Bhd the Hotel & Leisure business of AFP Land a division of at the Holy Angel University where he graduated as Magna Indonesia Sin Mas Group. Post this, Tim has created a number Cum Laude. He also took Management Development a key businesses and brands in the hotel and hospitality real Program at the Asian Institute of Management and Executive estate private equity space including Zinc Hospitality, Cosi Development Program (LEAP) at the Harvard School of Hotels and Silverneedle Hospitality before joining Century Business. Properties Group to create and roll out multiple Hotel and Hospitality Real Estate projects in the Philippines. Ms. Maria Theresa Fucanan Yu, 38 years old, Filipino, is the Vice-President for Corporate Communications of the Mr. John Paul Flores, 36 years old, Filipino, is the Comptroller Company. As part of her corporate background, she served of the Company. He graduated from the Laguna College with as Assistant Vice-President and Public Relations Manager a Bachelor of Science Degree in Accountancy. Prior to joining of the Company. Prior to joining the Company in 2007, she the Company, he served as a Senior Auditor of Punongbayan served as an editor and reporter for various sections of The and Araullo Auditing Firm. Manila Times. Ms. Fucanan graduated cum laude with a Bachelor’s Degree in Journalism from the University of Santo Tomas in 2001.

148 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 149 CORPORATE GOVERNANCE CORPORATE GOVERNANCE BOARD MATTERS

BOARD OF DIRECTORS POLICY ON TREATMENT OF SHAREHOLDERS

Nominator in the last Elected when No. of The Board of Directors of CPGI principles and best practices. The evaluates compliance issues and If nominee, election (if ID, state the Date last elected (if ID, (Annual / years believes that corporate governance corporate powers, business and concerns within the Company. The identify the relationship with the state the number of Special served as Director’s Name Type principal nominator) Date first elected years served as ID) Meeting) director is a necessary component of what property of the corporation are Compliance Officer ensures that constitutes sound strategic business exercised and controlled by the Board relevant and accurate information are Jose E.B. Antonio Executive CPI Karl Cabili –None 7/11/2011 06/14/2018 Annual 8 management. CPGI undertakes every of Directors. The Company follows timely disclosed to the stockholders, effort necessary to create awareness and adheres to the following policies the investing public and regulatory Jose L. Cuisia, Jr. Independent CPI Karl Cabili – None 6/22/2015 06/14/2018, 4yrs Annual 4 and promote best governance under the revised Amended Corporate agencies, and ensures that the Board of standards. The Company’s Articles of Governance Manual as submitted to the Directors, management and employees Stephen T. CuUnjieng Independent CPI Karl Cabili – None 6/22/2015 06/14/2018, 4yrs Annual 4 Incorporation and By-laws, including Honorable Commission on May 31 2017 are in compliance with the rules and its amendments, constitute the basic in compliance with SEC Memorandum regulations of regulatory agencies, that structures of governance, primary Circular No. 9 Series 2014 and SEC company policies and procedures are Carlos C. Ejercito Independent CPI Karl Cabili – None 6/22/2015 06/14/2018, 4yrs Annual 4 duties of the Board of Directors and Memorandum Circular No. 19 Series of being followed, and that behavior in Officers while the Manual of Corporate 2016. the organization meets the company’s John Victor R. Antonio Executive CPI Karl Cabili – None 7/11/2011 06/14/2018 Annual 8 Governance supplements these Articles Standards of Conduct. of Incorporation and By-laws in setting It is the primary duty of the Board of Jose Marco R. Antonio Executive CPI Karl Cabili – None 7/11/2011 06/14/2018 Annual 8 forth the principles of good and Directors to promote shareholders’ The Company respects all rights of transparent governance. The company rights. The Management on the shareholders, especially the minority has only one class of shares and each other hand is responsible for guiding shareholders which are provided in its Jose Roberto R. Antonio Executive CPI Karl Cabili – None 7/11/2011 06/14/2018 Annual 8 share carries one vote. the Company towards its goals. The Articles of Incorporation, as follows: Chief Compliance Officer oversees Jose Carlo R. Antonio Executive CPI Karl Cabili – None 7/11/2011 06/14/2018 Annual 8 The Board of Directors and the Officers the Corporate Compliance Program, ensures adherence to mandated functioning as an independent and Rafael G. Yaptinchay Executive CPI Karl Cabili – None 7/11/2011 06/14/2018 Annual 8 regulatory compliances, corporate objective body that reviews and

Ricardo P. Cuerva Non-Executive CPI Karl Cabili – None 7/11/2011 06/14/2018 Annual 8

152 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 153 CORPORATE GOVERNANCE ARTICLE 6: STOCKHOLDERS’ RIGHTS AND PROTECTION OF MINORITY STOCKHOLDERS’ INTERESTS

The Company recognizes that the most cogent proof of (4) Right to Information (6) Appraisal Right corporate governance is that which is visible to the eyes of its (a) The shareholders shall be provided, upon request, The shareholders shall have appraisal right or the right shareholders. Therefore, the provisions hereunder are issued with periodic reports which disclose personal and to dissent and demand payment of the fair value of their for the guidance of all internal and external parties concerned, professional information about the directors and shares in the manner provided for under Section 82 of as governance covenant between the Company and all its officers of the Company, and certain other matters the Corporation Code of the Philippines, under any of shareholders. such as the directors’ and officers’ holdings of the the following circumstances: Company’s shares, dealings with the Company, A. For the protection of shareholders and minority interests, relationships among directors and key officers of the (a) In case an amendment to the Articles of the Board shall be committed to respect the following Company, and the aggregate compensation of the Incorporation of the Company has the effect of rights of the stockholders: directors and officers. changing or restricting the rights of any stockholders (b) The minority shareholders shall have the right to or class of shares, or of authorizing preferences in any (1) Voting Right propose the holding of stockholder’s meeting, and respects superior to those of outstanding shares of (a) Shareholders shall have the right to elect, remove the right to propose items in the agenda of the any class, or of extending or shortening the term of and replace directors and vote on certain corporate meeting, provided that the items in the agenda are corporate existence; acts, in accordance with the Corporation for legitimate business purposes. Legitimate (b) In case of sale, lease, exchange, transfer, mortgage, Code. business purposes shall include information pledge or other disposition of all or substantially all of (b) Cumulative voting shall be used in the election of on matters under the immediately succeeding the corporate property and assets as provided in the directors. subsection. Corporation Code; and (c) A director shall not be removed without cause, if it (c) The minority shareholders shall have access to any (c) In case of merger or consolidation. will deny minority shareholders of representation in and all information relating to matters for which the the Board. management is accountable for and should disclose B. It shall be the duty of the Board to promote shareholder to the shareholders. rights, remove impediments to exercise of shareholders’ (2) Pre-Emptive Right rights, and allow possibilities to seek redress for violation All stockholders shall have pre-emptive rights, unless (5) Right to Dividends of their rights. The Board shall encourage the exercise of the same is denied in the Articles of Incorporation, or an (a) All shareholders shall have the right to receive shareholders’ voting rights and the solution of collective amendment thereto, of the Company. All stockholders dividends, subject to the discretion of the Board. action problems through appropriate mechanisms. The shall have the right to subscribe to the capital stock of (b) The Company shall be compelled to declare Board shall pave the way for the electronic filing and the Company. The Articles of Incorporation shall lay dividends when its retained earnings shall be in distribution of shareholder information necessary to make down the specific rights and powers of the shareholders excess of one hundred percent (100%) of its paid-in informed decisions, subject to legal constraints. with respect to the particular shares they hold, all of capital stock except in the following cases: which shall be protected by law so long as they shall (b.1) When justified by definite corporate expansion The Company likewise has adopted a Governance Self-rating not be in conflict with the Corporation Code. projects or programs approved by the Board, or form and important regulations on Corporate Governance (b.2) When the Company is prohibited under any Policies, as follows: (3) Power of Inspection loan agreement with any financial institution Subject to reasonable restrictions in accordance or creditor, whether local or foreign, from with the Corporation Code and jurisprudence, all declaring dividends without its consent, and shareholders shall be allowed to inspect the corporate such consent has not been secured, or books and records of the Company, including minutes (b.3) When it can be clearly shown that such of Board meetings and stock registries, and shall be retention is necessary under special furnished with annual reports, including financial circumstances obtaining in the Company, such statements, without cost. as when there is a need for a special reserve for probable contingencies.

154 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 155 CORPORATE GOVERNANCE ARTICLE 10: REGULAR REVIEW OF ARTICLE 9: COMMITMENT TO THE MANUAL AND ARTICLE 7: GOVERNANCE SELF-RATING FORM GOOD CORPORATE GOVERNANCE SCORECARD

The Board shall create an internal self-rating system that can measure the The Board of Directors and its Senior Management shall establish and To monitor the compliance of CPGI with performance of the Board and Management in accordance with the criteria provided implement this Manual on Corporate Governance in accordance with the SEC this Manual, Commission shall require for in this Code. Revised Code of Corporate Governance. The rules embodied in this manual the Company to accomplish annually shall be used as reference by the members of the Board and Management. a scorecard on the scope, nature and The creation and implementation of such self-rating form, including its salient extent of the actions of the Board features, may be disclosed in the corporation’s annual report. The following are the guidelines for the effective implementation of this and Senior Management to meet the Manual: objectives of this Manual.

A. COMMUNICATION PROCESS The Commission shall periodically ARTICLE 8: REPORTORIAL OR DISCLOSURE SYSTEM (1) This Manual shall be available for inspection by any stockholder of the review this Code to ensure that it meets Company at reasonable hours on business days. its objectives. OF COMPANY’S CORPORATE GOVERNANCE POLICIES (2) All directors, executives, and division and department heads of the Company are tasked to ensure the thorough dissemination and The essence of corporate governance is transparency. The more transparent the internal communication of this Manual to all employees and related parties and workings of the Company are, the more difficult it will be for Management and dominant to enjoin compliance in the process. stockholders to mismanage the Company or misappropriate its assets. (3) An adequate number of printed copies of this Manual must be It is therefore essential that all material information about the corporation which could reproduced by the Human Resources Department, or its equivalent, adversely affect the viability or the interest of the Company’s stockholders and other of the Company, with a minimum of at least one (1) hard copy of the stakeholders shall be publicly and timely disclosed. Information shall include but not limited Manual for every department. to earnings results, acquisition or disposition of assets, off balance sheet transactions, related party transactions and direct and indirect remuneration of the Board and Management. B. TRAINING PROCESS (1) If necessary, funds shall be allocated for the purposes of conducting an The Board shall therefore commit at all times to full disclosure of materials information orientation program or workshop to operationalize this Manual dealings. It shall cause the filings of all required information through the appropriate (2) A director shall, before assuming as such, be required to attend a Exchange mechanisms for listed companies and submissions to the Commission for the seminar on corporate governance which shall be conducted by a duly interest of its stockholders and other stakeholders. (as amended on July 31, 2014) recognized private or government institute.

The following are the guidelines of the Company’s disclosure system: C. MONITORING AND ASSESSMENT (1) Each Committee shall report regularly to the Board of Directors. A. The reports or disclosures required under this Manual shall be prepared and submitted (2) The Compliance Officer shall establish an evaluation system to to the Commission by the responsible committee or officer through the Company’s determine and measure compliance with this Manual. Any violation Compliance Officer thereof shall subject the responsible officer to employee to the penalty B. All material information shall be publicly disclosed. Material information shall be anything provided under Article 11 of this Manual. that could potentially affect share price, and shall include earnings results, acquisition or (3) The establishment of such evaluation system, including the features disposal of assets, board changes, related party transactions, shareholdings of directors thereof, shall be disclosed in the Company’s Annual Report (SEC Form and changes in ownership. 17-A). The adoption of such performance evaluation system must be C. Other information that shall always be disclosed includes remuneration, including stock covered by Board approval. options, of all directors and senior management and off-balance sheets transactions. (4) This Manual shall be subject to annual review, unless the same D. All disclosed information shall be released via the approved stock exchange procedure for frequency is amended by the Board. company announcements, as well as through the current and annual reports. (5) All business processes and practices being performed within any E. The Board shall commit at all times to fully disclose material information dealings. The department or business unit of the Company that are not consistent Board shall cause the filing of all required information for the interest of the stakeholders. with any portion of this Manual shall be revoked, unless upgraded to compliant extent.

156 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 157 CORPORATE GOVERNANCE DIRECTORSHIP IN THE COMPANY’S GROUP DIRECTORSHIP IN OTHER LISTED COMPANIES

Below are members of the company’s Board of Directors who hold the office of Type of Directorship (Executive, Non-Executive, director in other companies within its Group: Director’s Name Corporate Name of the Group Company Independent). Indicate if director is also the Chairman. Rafael G. Yaptinchay Marc Ventures Inc. Independent

Type of Directorship (Executive, Non-Executive, Jose L. Cuisia, Jr Phinma Corporation Independent Director’s Name Corporate Name of the Group Company Independent). Indicate if director is also the Chairman. SM Prime Holdings Inc. Independent Jose E.B. Antonio Century Properties Inc. (CPI, Parent Company) Executive, Chairman Manila Water Company, Inc. Independent Century City Development Corporation (CCDC) Executive, Chairman Stephen T. CuUnjieng Aboitiz Equity Ventures, Inc. Independent Century City Corporation (CCC) Executive, Chairman Carlos C. Ejercito Aboitiz Power Corporation Independent Century Limitless Corporation (CLC) Executive, Chairman Bloomberry Resorts Corporation Independent Century Properties Management Inc. (CPMI) Executive, Chairman John Victor R. Antonio CPI Executive CCDC Executive RELATIONSHIP WITHIN THE COMPANY AND ITS GROUP CCC Executive CLC Executive Director’s Name Name of the Significant Shareholder Description of the relationship CPMI Executive Jose E.B. Antonio Century Properties Inc. (CPI, Parent Company) Majority Shareholder Jose Marco R. Antonio CPI Executive John Victor R. Antonio CPI Shareholder, son of Jose E.B. Antonio CCDC Executive Jose Marco R. Antonio CPI Shareholder, son of Jose E.B. Antonio CCC Executive Jose Roberto R. Antonio CPI Shareholder, son of Jose E.B. Antonio CLC Executive Jose Carlo R. Antonio CPI Shareholder, son of Jose E.B. Antonio CPMI Executive Jose Roberto R. Antonio CPI Executive LIMIT ON THE NUMBER OF BOARD SEATS IN OTHER COMPANIES (PUBLICLY LISTED, CCC Executive ORDINARY AND COMPANIES WITH SECONDARY LICENSE) THAT AN INDIVIDUAL CLC Executive DIRECTOR OR CEO MAY HOLD SIMULTANEOUSLY:

Jose Carlo R. Antonio CPI Executive Director’s Name Guidelines Maximum Number of Directorships in other companies CLC Executive Executive Director No limites placed N.A. CPMI Executive Non-Executive Director No limites placed N.A. Rafael G. Yaptinchay CPI Executive CEO No limites placed N.A. Ricardo P. Cuerva CPI Executive The Chief Executive Officer and other executive directors of the Company shall submit themselves to a low indicative limit on membership in other corporate boards, within the limit as may be allowed by the Securities Regulations Code and relevant rules on Corporate Governance. The same low limit shall apply to independent, non-executive directors who serve as full-time executives in other corporations. An exception to this rule may be applied to memberships in the corporate boards of subsidiaries or affiliates of the Company. In any case, the capacity of directors to serve the Company with diligence shall not be compromised.

158 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 159 CORPORATE GOVERNANCE

MEMBERS OF THE COMPANY’S BOARD OF DIRECTORS WHO DIRECTLY AND INDIRECTLY OWN SHARES IN THE COMPANY: DIVERSITY IN THE BOARD

As of December 31, 2018 The company strives to promote diversity within the Board. Positions which are not taken up by the major shareholders are filled by members who have relevant Director’s Name Number of Direct shares Number of Indirect shares / Through (name of record owner) % of Capital Stock experience and can bring ideas and opinions that is both beneficial for the Company Jose E.B. Antonio 79,530,000 + 1 nominal share 0 0.685 and its shareholders. John Victor R. Antonio 1 nominal 0 0 The qualifications of directors shall be in accordance with the qualifications for Jose Marco R. Antonio 1 nominal 0 0 membership provided for in the Corporation Code, Securities Regulation Code and Jose Roberto R. Antonio 1 nominal 0 0 other relevant laws which include among others, the following: Jose Carlo R. Antonio 1 nominal 0 0 1) The candidate shall be a holder of at least one (1) share of stock of the Company; Rafael G. Yaptinchay 1 nominal 0 0 2) The candidate shall at least be a college graduate or shall have sufficient Ricardo P. Cuerva 214,995,168 + 1 nominal share 0 1.85 experience in managing the business of the Company to substitute and compensate for such formal education; Total 294,525,178 0 2.53 3) The candidate shall be at least twenty-one (21) years of age; 4) The candidate shall possess proven integrity and probity;

ROLES, ACCOUNTABILITIES AND DELIVERABLES ROLES, ACCOUNTABILITIES AND DELIVERABLES OF THE EXECUTIVE, OF THE CHAIRMAN AND CEO: NON-EXECUTIVE AND INDEPENDENT DIRECTORS Define and clarify the roles, accountabilities and deliverables of the Chairman and CEO. The company’s independent directors are well versed in corporate matters, experts in the field of financial, law and CHAIRMAN CHIEF EXECUTIVE DIRECTOR industry matters. They have the adequate understanding of the real estate industry and competence in managing relevant Role Foster long term growth Manages company operations industry and professional organizations. Other non- executive directors are experts in their own sector or industry.

Policies formulation and expressed fiduciary duties Initiate and develop corporate objectives and EXECUTIVE NON-EXECUTIVE INDEPENDENT DIRECTOR Accountabilities towards shareholders implement policies Role Represents Management Represents major shareholders’ interests Provides neutral observations Deliverables Comply with principles of good governance Meet revenue and growth targets Management of business Setting high standards for Accountabilities Ensures sustainable growth affairs best practice Safeguard interest of all Deliverables Meet corporate objectives Monitors company progress shareholders

An independent director shall mean a person other than an officer or employee of the corporation, its parent or its subsidiaries, or any other individual having a relationship with the corporation as would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Company’s Independent Directors have confirmed to the Corporate Secretary that they do not hold any interests affiliated with the Company, or any of the controlling shareholders at the time of their appointment and election.

In compliance with the SEC Memorandum circular no 9 series of 2011, the Company’s independent director has a term limit of five years. After the 5-year term limit, a two- year (2) grace period is implemented with no term limits.

160 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 161 CORPORATE GOVERNANCE

SELECTION/APPOINTMENT, RE-ELECTION, DISQUALIFICATION, REMOVAL, REINSTATEMENT AND SUSPENSION DISQUALIFICATION OF DIRECTORS

PROCEDURE PROCESS ADOPTED CRITERIA I. Permanent Disqualification II. Temporary Disqualification The following shall be grounds for the permanent Any of the following shall be a ground for the temporary (i) Executive Directors Nominated/Elected Ex-officio – CEO disqualification of a director: disqualification of a director: (ii) Non-Executive Directors Nominated/Elected Major Shareholders Selection/Appointment a. Any person finally convicted judicially of any offense a. Refusal to fully disclose the extent of his business Expertise in industry; involving moral turpitude or fraudulent acts or interests as required by the Securities Regulation Code (iii) Independent Directors Nominated/Elected Experience and knowledge transgressions; and its implementing Rules and Regulations. This disqualification shall be in effect as long as the director’s Election at Annual Stockholders (i) Executive Directors One vote for one share b. Any person finally found by the Commission or court refusal persists; Meeting of law or administrative body to have wilfully violated, Election at Annual Stockholders Re-appointment (ii) Non-Executive Directors One vote for one share or wilfully aided, abetted, counselled, induced or b. Absence or non-participation for whatever reason for Meeting procured the violation of, any provision of the Securities more than fifty percent (50%) of all Board meetings, both Election at Annual Stockholders Regulation Code, the Corporation Code, or any other regular or special, of a member of the Board of Directors (iii) Independent Directors One vote for one share Meeting law administered by the Commission or the Bangko during his incumbency, or any twelve (12) month Sentral ng Pilipinas, or any rule, regulation or order of the period during said incumbency, unless the absence is (i) Executive Directors NA NA Permanent Disqualification Commission or the Bangko Sentral ng Pilipinas; due to illness, death in the immediate family or serious – No Directors Permanently (ii) Non-Executive Directors NA NA accident. The disqualification applies for purposes of the Disqualified (iii) Independent Directors NA NA c. Any person judicially declared to be insolvent; succeeding election;

Temporary Disqualification (i) Executive Directors NA NA d. Any person finally found guilty by a foreign court or c. Dismissal or termination from directorship in another – No Directors Temporarily (ii) Non-Executive Directors NA NA tribunal or equivalent financial regulatory authority of listed corporation for cause. This disqualification shall be Disqualified acts, violations or misconduct similar to any of the acts, in effect until he has cleared himself of any involvement (iii) Independent Directors NA NA violations or misconduct enumerated in the foregoing in the alleged irregularity; (i) Executive Directors NA NA paragraphs a, b, and c; Removal – No Directors (ii) Non-Executive Directors NA NA d. Being under preventive suspension by the Company, if removed from office e. Conviction by final judgment of an offense punishable and executive director; (iii) Independent Directors NA NA by imprisonment for a period exceeding six (6) years, (i) Executive Directors NA NA or a violation of the Securities Regulation Code or the e. Conviction of any of the grounds for the disqualification Re-instatement – No Corporation Code committed within five (5) years prior of directors that has not yet become final; and Directors Removed from or (ii) Non-Executive Directors NA NA to the date of the director’s nomination, election or re-instated into office (iii) Independent Directors NA NA appointment; and f. Beneficial equity ownership of an independent director in the corporation or its subsidiaries and affiliates of (i) Executive Directors NA NA Suspension – No Directors f. If the independent director becomes an officer or more than two percent (2%) of its subscribed capital (ii) Non-Executive Directors NA NA Suspended employee of the Company, such independent director stock. The disqualification shall be lifted if the limit is (iii) Independent Directors NA NA shall be automatically disqualified from being an later complied with. independent director. The qualifications of directors shall be in accordance with the qualifications for A temporarily disqualified director shall, within sixty (60) membership which include among others, the following: business days from such disqualification, take the appropriate (1) The candidate shall be a holder of at least one (1) share of stock of the Company; action to remedy or correct the disqualification. Failure to (2) The candidate shall at least be a college graduate or shall have sufficient do so for unjustified reasons shall disqualify the director experience in managing the business of the Company to substitute and permanently. compensate for such formal education; (3) The candidate shall be at least twenty-one (21) years of age; (4) The candidate shall possess proven integrity and probity;

162 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 163 CORPORATE GOVERNANCE

VOTING RESULT OF THE LAST ANNUAL GENERAL MEETING HELD LAST JUNE 14, 2018

DIRECTOR’S NAME PROCEDURE ORIENTATION AND Jose E.B. Antonio 8,847,227,934 shares or 76.27% EDUCATION PROGRAM Jose L. Cuisia, Jr 8,847,227,934 shares or 76.27% Under the Company’s Corporate Governance Stephen T. CuUnjieng 8,847,227,934 shares or 76.27% manual and best practice, all new directors and Carlos C. Ejercito 8,847,227,934 shares or 76.27% senior officers are required to take the orientation on good governance and risk management. John Victor R. Antonio 8,780,304,708 shares or 75.69% The Board of Directors shall take note on the Jose Marco R. Antonio 8,780,304,708 shares or 75.69% need to implement a policy program for new Jose Roberto R. Antonio 8,780,304,708 shares or 75.69% directors. The current board members, save for the three new Independent Directors, are more Jose Carlo R. Antonio 8,780,304,708 shares or 75.69% than 5 years in office since CPGI has changed it Rafael G. Yaptinchay 8,780,304,708 shares or 75.69% Management from East Asia Power Resources last 2011. Ricardo P. Cuerva 8,780,304,708 shares or 75.69%

IN-HOUSE TRAINING AND EXTERNAL COURSES ATTENDED BY DIRECTORS AND SENIOR MANAGEMENT FOR THE PAST THREE (3) YEARS:

1. Corporate Governance Orientation Course for Directors and Officers – August 2011, conducted by Sycip Gorres and Velayo 2. ISO Training Seminar for Systems and Data – May 2012, Neville Clark Inc. 3. Strategic Planning Seminar – July 2012, In-house, Corporate Planning Group 4. Risk Management Seminar – October 2012, Ateneo Graduate School of Business 5. Corporate Governance Seminar for Directors and Key Officers – November 2014, Philippine Stock Exchange 6. Annual Corporate Governance Training Program – November 2015, Institute of Corporate Directors 7. SEC Corporate Governance Forum – August 2016, SEC 8. Annual Corporate Governance Training Program – September 2017, Institute of Corporate Directors 9. Annual Corporate Governance Training Program – December 19, 2018, Institute of Corporate Directors

The executive directors as well as the Senior Officers of the Company attended the Annual Corporate Governance Training Program last December 19, 2018 conducted by the Institute of Corporate Directors. The training program shall continue and will be conducted annually.

164 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 165 CORPORATE GOVERNANCE CODE OF BUSINESS CONDUCT & ETHICS

Company’s policies on the following business conduct or ethics affecting directors, The rules and procedures have been disseminated to management and employees senior management and employees: under the Company’s code of conduct and ethics.

BUSINESS CONDUCT & ETHICS DIRECTORS SENIOR MANAGEMENT EMPLOYEES The Company is committed to provide an encouraging work environment to its Are not allowed to be employees, and be an engaging business partner to its clients and service providers. Does not vote on activities Are not allowed to be involved involved in the decision- It is the policy of CPGI to promote discipline in the organization by taking corrective Conflict of Interest in which there is a conflict of in the decision- making process making process if conflict of action as may be needed for the protection of all employees and clients, CPGI’s interest if conflict of interest is present interest is present properties and interests. These rules were prepared to ensure fair and consistent Conduct of Business and Fair Should follow best practices Should follow best practices and Should follow best practices treatment and constructive actions of any employee who has made a mistake. Dealings and company policies company policies and company policies The responsibility of ensuring that discipline exists in CPGI is jointly vested upon HRD, Based on The Code of Based on The Code of Based on The Code of Conduct Department Heads and Supervisors. All supervisors and Department Heads should Receipt of gifts from third Conduct & Discipline, and Conduct & Discipline, and & Discipline, and Offenses & encourage the development of an environment where positive discipline comes parties Offenses & Corresponding Offenses & Corresponding Corresponding Penalties naturally. Penalties Penalties Monitored by the Policy measures will be promulgated as the need arises to supplement, implement Compliance with Laws & Monitored by the compliance Monitored by the compliance compliance officer and other and amend any of the provisions contained herein. Regulations officer and other officers officer and other officers officers Policy on non-disclosure Policy on non-disclosure in Policy on non-disclosure Respect for Trade Secrets/Use in place. Discouraged from place. Discouraged from using in place. Discouraged from of Non-public Information using such information such information using such information Use of Company Funds, Regulated through Manual Regulated through Manual on Regulated through Manual on Assets and Information on Corporate Governance Corporate Governance Corporate Governance Meet at least the minimum Meet at least the minimum Meet at least the minimum Employment & Labor Laws & criteria set by the labor criteria set by the labor criteria set by the labor Policies authorities authorities authorities Based on Manual of Corporate Based on Manual of Based on Manual of Disciplinary action Governance and Company Corporate Governance and Corporate Governance policy Company policy Based on The Code of Based on The Code of Based on The Code of Conduct Conduct & Discipline, and Conduct & Discipline, and Conflict Resolution & Discipline, and Offenses & Offenses & Corresponding Offenses & Corresponding Corresponding Penalties Penalties Penalties

Senior Management refers to the CEO and other persons having authority and responsibility for planning, directing and controlling the activities of the company.

166 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 167 CORPORATE GOVERNANCE

RELATED PARTY TRANSACTIONS CONFLICT OF INTEREST

Policies and Procedures (i) Directors/Officers and 5% or more Shareholders

RELATED PARTY TRANSACTIONS POLICIES AND PROCEDURES DIRECTOR’S NAME DETAILS OF CONFLICT Parent Company All related party transactions have to be on an arms-length basis if the company Jose E.B. Antonio gets the most competitive product from a related party. Contracts are reviewed John Victor R. Antonio by senior management, approved by the majority of the board, monitored and Jose Marco R. Antonio of Interest (Actual or Probable) recorded accordingly by the Compliance officer such contracts are deemed Jose Roberto R. Antonio material for disclosure and affects directly the shareholders of the company and Jose Carlo R. Antonio other officers in charge for other contracts as the case may be. Ricardo P Cuerva Mr. Cuerva is one of the shareholders of Joint Ventures All related party transactions have to be on an arms-length basis if the company CPI. No actual nor probable conflict of gets the most competitive product from a related party. Contracts are reviewed interest as of to date. by senior management, approved by the majority of the board, monitored and recorded accordingly by the Compliance officer such contracts are deemed DIRECTOR’S OFFICER/S DETAILS OF CONFLICT material for disclosure and affects directly the shareholders of the company and – N.A. other officers in charge for other contracts as the case may be.

Subsidiaries All related party transactions have to be on an arms-length basis if the company DIRECTOR’S SIGNIFICANT SHAREHOLDERS DETAILS OF CONFLICT gets the most competitive product from a related party. Contracts are reviewed PCD Nominee Corporation Foreign PCD Nominee corporation owns beneficial by senior management, approved by the majority of the board, monitored and and Filipino shares of more than 5%. No actual nor recorded accordingly by the Compliance officer such contracts are deemed probable conflict of interest is involved material for disclosure and affects directly the shareholders of the company and since these shares are publicly held and other officers in charge for other contracts as the case may be. traded. Entities Under Common Control All related party transactions have to be on an arms-length basis if the company gets the most competitive product from a related party. Contracts are reviewed The control environment of the Company consists of (a) the Board which ensures that by senior management, approved by the majority of the board, monitored and the Company is properly and effectively managed and supervised; (b) a Management recorded accordingly by the Compliance officer such contracts are deemed that actively manages and operates the Company in a sound and prudent manner; material for disclosure and affects directly the shareholders of the company and (c) the organizational and procedural controls supported by effective management other officers in charge for other contracts as the case may be. information and risk management reporting systems; and (d) an independent Substantial Stockholders All related party transactions have to be on an arms-length basis if the company audit mechanism to monitor the adequacy and effectiveness of the corporation’s gets the most competitive product from a related party. Contracts are reviewed governance, operations, and information systems, including the reliability and by senior management, approved by the majority of the board, monitored and integrity of financial and operational information, the effectiveness and efficiency of recorded accordingly by the Compliance officer such contracts are deemed operations, the safeguarding of assets, and compliance with laws, rules, regulations material for disclosure and affects directly the shareholders of the company and contracts. Officers including spouse/children/ No such related party transaction siblings/parents The minimum internal control mechanisms for the performance of the Board’s and Management’s oversight responsibility include review of conflict of interest situations. Directors including spouse/children/ No such related party transaction siblings/parents The personal interest of directors, key officers and employees should never prevail Interlocking director relationship of The board member has to have knowledge of industry if he/she serves on the over the interest of the Company. If an actual or potential conflict of interest should Board of Directors board of subsidiary etc. arise on the part of directors, it should be fully disclosed, and the concerned director should not participate in the decision-making. If a director has an interest in a matter under consideration by the board, then the director should not participate in those discussions and the board should follow any further appropriate processes. Individual directors should be conscious of shareholder and public perceptions and seek to avoid situations where there might be an appearance of conflict of interest.

168 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 169 CORPORATE GOVERNANCE

RELATED PARTIES

NAMES OF RELATED SIGNIFICANT SHAREHOLDERS TYPE OF RELATIONSHIP BRIEF DESCRIPTION OF THE RELATIONSHIP Terms and Conditions of Transactions with Related Parties The Group in their regular conduct of business has entered into transactions with Jose E.B. Antonio Family Jose E.B. Antonio is the father of siblings related parties principally consisting of advances and reimbursement of expenses, John Victor R. Antonio Messrs. John Victor R. Antonio, Jose Marco development, management, marketing, leasing and administrative service Jose Marco R. Antonio R. Antonio, Jose Carlo R. Antonio and Jose agreements and purchases which are made at normal market prices. Jose Roberto R. Antonio Roberto R. Antonio. Through CPI, of which Jose Carlo R. Antonio all are shareholders, they own the majority The effects of the related party transactions are shown under the following accounts shares of CPGI. in the consolidated financial statements: Ricardo P. Cuerva Shareholder of Parent Company of Mr. Cuerva is one of the business partners CPGI and direct beneficial owner of of the CPGI subsidiaries for construction Due from Related Parties shares of CPGI. Business partner of the under Century Properties Management AMOUNT OF subsidiaries for construction under Century and Construction Corporation 2018 2017 TRANSACTION TERMS AND CONDITIONS Properties Management and Construction Corporation Ultimate Parent 161,480,105 235,324,180 (73,844,075) Noninterest bearing, Stockholders 160,320,970 153,076,337 7,24 4,633 due and demandable, Parties are considered to be related if one party has the ability, directly or indirectly, Other affiliates 72,553,433 102,845,431 (30,291,998) unsecured, no impairment to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if 394,354,508 491,245,948 they are subject to common control or common significant influence which include affiliates. Due to Related Parties

AMOUNT OF 2018 2017 TRANSACTION TERMS AND CONDITIONS Ultimate Parent 37,070,486 – 37,070,486 Noninterest bearing, due Stockholders 19,175,305 19,175,305 – and demandable, unsecured Other affiliates 42,329,407 28,995,726 13,333,681 98,575,198 48,171,031

Significant transactions of the Group with related parties are described below:

Due from related parties pertains to advances provided by the Group to the stockholders and other affiliates. These are generally unsecured, noninterest-bearing, and are due and demandable and are not impaired.

Due to related parties pertains to advances made by the Group for its capital expenditures. These are generally noninterest bearing and are due and demandable.

170 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 171 CORPORATE GOVERNANCE

ALTERNATIVE DISPUTE RESOLUTION

It is the Board’s responsibility to foster the long-term g. Adopt a system of internal checks and balances; success of the Company and secure its sustained competitiveness in a manner consistent with the Board’s h. Formulate and implement policies and procedures that fiduciary responsibility, including the means to effectively would ensure the integrity and transparency of related Management’s performance, which the Board shall exercise party transactions between and among the corporation in the best interest of the Company, its shareholders and and its parent company, joint venture, subsidiaries, other stakeholders. The Board shall conduct itself with utmost associates, affiliates, major stockholders, officers and honesty and integrity in the discharge of its duties, functions directors, including their spouses, children and dependent and responsibilities. siblings and parents, and of interlocking director relationships by members of the Board. To ensure a high standard of best practice for the Company, its shareholders and stakeholders, the Board shall: (as amended i. Identify key risk areas and key performance indicators, and on July 31, 2014) monitor these factors with due diligence;

a. Install, through the Nomination and Remuneration j. Constitute an Audit Committee and such other committees Committee, a process of selection that will ensure a mix of it deems necessary to assist the Board in the performance competent directors and officers; of its duties and responsibilities.

b. Determine the Company’s purpose, its mission and vision, k. Proper discharge Board functions by meeting regularly. and strategies to carry out the Company’s objectives; Independent views during the Board meetings shall be given due consideration and all such meetings shall be duly c. Ensure that the Company complies with all relevant laws, minuted; and rules and regulations, and codes of best business practices; l. Keep Board authority within its powers, as prescribed in the d. Appoint a Compliance Officer who shall have the rank of at Articles of Incorporation and By-Laws of the Company and least vice president, In the absence of such appointment, in relevant laws, rules and regulations. the Corporate Secretary and/or the Assistant Corporate Secretary shall act as Compliance Officer. m. Establish and maintain an alternative dispute resolution system in the Company that can amicably settle conflicts e. Identify the Company’s major and other stakeholders, and or differences between the Company and its stockholders, formulate a clear policy on communicating or relating with and the Company and third parties, including the them through an effective investor relations program; (as regulatory authorities. amended on July 31, 2014) The company has not had disputes in the last 3 years with the f. Establish and maintain an investor relations program stockholders, regulatory authorities and third parties. that will keep the stockholders informed of important developments in the corporation. If feasible, the corporation’s CEO or Chief Financial Officer shall exercise oversight responsibility over this program

172 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 173 CORPORATE GOVERNANCE

BOARD MEETINGS & ATTENDANCE THE CORPORATE SECRETARY Regular Board meetings are held once in every quarter. The meetings are scheduled Under the company’s manual of corporate governance, the Corporate Secretary must before the beginning of the year. For this year, the Regular Board Meetings are be a licensed lawyer and the role of the corporate secretary is expressly stated in the scheduled as follows: manual. He is basically the individual who keeps the official records of the company, particularly the minutes and transactions of the meetings held by the Board and First Quarter – March 18 shareholders. Apart from the principal function, and as required by the Company’s Second Quarter – May 8 By-laws, he is the custodian of record books showing details required by law with Third Quarter – August 8 respect to stockholdings of the corporation, attends to the giving and serving of Fourth Quarter – November 8 notices of the corporation; certifies to corporate acts and countersigns corporate documents or certificates; and makes reports or statements as may be required by There are also special board meetings that are held from time to time, as the need law or rules. to discuss important business matters and updates from the Company arise. These special meetings are scheduled a week ahead of the scheduled dates. Such role includes assisting the Chairman in preparing the board agenda, facilitating training of directors, keeping directors updated regarding any relevant statutory and regulatory changes, etc. ATTENDANCE OF DIRECTORS – ALL DIRECTORS WERE RE-ELECTED AND ELECTED, RESPECTIVELY IN JUNE 2018. The corporate secretary is a licensed attorney with expertise in legal and corporate law. NO. OF MEETINGS NO. OF HELD DURING THE MEETINGS BOARD NAME DATE OF ELECTION YEAR ATTENDED % COMMITTEE DETAILS OF THE PROCEDURES Chairman Jose Eduardo B. Antonio June 2018 6 6 100% Executive Copies of presentations and matters in the Agenda are provided by Management and distributed to the Board Member John Victor R. Antonio June 2018 6 3 50% Audit at least three (3) days before prior to the scheduled Member Jose Marco R. Antonio June 2018 6 6 100% Nomination, Remuneration and Committee Meeting These presentations or materials Compensation Member Jose Carlo R. Antonio June 2018 6 6 100% consist of complete and adequate information about the Risk Management Committee matters to be taken in the meeting. Information includes Member Jose Roberto R. Antonio June 2018 6 4 70% the background or explanation on matters brought Related Party Transactions before the Board, disclosures, budgets, forecasts and Member Ricardo P. Cuerva June 2018 6 6 100% Committee internal financial documents. Member Rafael G. Yaptinchay June 2018 6 6 100% Independent Jose L. Cuisia, Jr June 2018 6 6 100% Independent Stephen T. CuUnjieng June 2018 6 6 100% EXTERNAL ADVICE Independent Carlos C. Ejercito June 2018 6 6 100% PROCEDURES DETAILS The Non-executive directors endeavor to have separate meeting, without the Generally, all board papers are sent at The Company’s External Counsel, During some meetings, directors get the opinion of the presence of any executive, at least once during the year. least three (3) days prior to the meeting. Atty. Nilo S. Divina is requested to external counsel on some legal matters. attend all regular and special board Under the Corporation’s By-laws, a majority of the number of directors constitutes All board members have independent meetings. The Corporate Secretary a quorum for the transaction of corporate business and every decision of at least access through landline, mobile, email, is likewise a licensed attorney. As the majority of the directors present in the meeting at which there is a quorum is valid as fax and other means of communication. need arises, directors reserve the right a corporate act except for the election of officers and other corporate acts expressly to avail of external advice. stated in the SEC and PSE requiring the vote of the majority of all members of the Board.

174 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 175 CORPORATE GOVERNANCE

REMUNERATION MATTERS

REMUNERATION PROCESS REMUNERATION POLICY AND STRUCTURE FOR

PROCESS CEO TOP 4 HIGHEST PAID MANAGEMENT OFFICERS EXECUTIVE AND NON-EXECUTIVE DIRECTORS Based on industry standards, as (1) Fixed remuneration Based on industry standards, as REMUNERATION POLICY STRUCTURE OF COMPENSATION PACKAGES HOW COMPENSATION IS CALCULATED determined by the Board of Directors determined by the Board of Directors (without the presence of the concerned (without the presence of the concerned Executive Directors Fixed annual payment Basic Pay, performance bonus Based on Industry standard, Officer/Executive Director) and Officer/Executive Director) and depending on profitability as determined by the Board recommended by the Nomination and recommended by the Nomination and of Directors (without the Compensation Committee Compensation Committee presence of the concerned Officer/Executive Director) (2) Variable remuneration As determined by the Board of Directors As determined by the Board of and recommended by (without the presence of the concerned Directors (without the presence of the the Nomination and Officer/Executive Director) and concerned Officer/Executive Director) Compensation Committee recommended by the Nomination and and recommended by the Executive Compensation Committee Committee and the Nomination and Non-Executive Directors Per diem for Independent Per diem of Php100,000.00 for Based on Industry standard, as Compensation Committee Directors Independent Directors for each determined by the Executive board and committee meeting Directors and recommended (3) Per diem allowance Not provided Per diem allowance is given to by the Nomination and Management officers who are on official Compensation Committee business for the reasonable travel expenses. (4) Bonus Based on operational targets, as Based on operational targets, as determined by the Board of Directors determined by the Board of Directors REMUNERATION SCHEME DATE OF STOCKHOLDER’S APPROVAL (without the presence of the concerned (without the presence of the concerned Executive Directors are given their regular compensation Stockholder’s approval for remuneration of Executive Directors is Officer/Executive Director) and Officer/Executive Director) and and benefits similar to the compensation structure of other not required. Per Company’s Manual on Corporate Governance, recommended by the Nomination and recommended by the Nomination and Officers of the Company. the Company shall establish a formal and transparent procedure Compensation Committee Compensation Committee for the development of a policy on executive remuneration or (5) Stock Options and other financial As determined by the Board of Directors As determined by the Board of Directors determination of remuneration levels for individual directors or instruments (without the presence of the concerned (without the presence of the concerned officers depending on the particular needs of the Company. No Officer/Executive Director) and Officer/Executive Director) and director should participate in deciding on his remuneration. recommended by the Nomination and recommended by the Nomination and Non-Executive Directors and Independent Directors do not The current per diem rate was approved by the Board of Directors Compensation Committee Compensation Committee have regular compensation or benefits. They are only given last June 22, 2015. (6) Others (specify) – – per diem based on their attendance per meeting.

176 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 177 CORPORATE GOVERNANCE

REMUNERATION MATTERS

NUMBER OF MEMBERS, FUNCTIONS AND RESPONSIBILITIES

NO. OF NO. OF NON- NO. OF EXECUTIVE EXECUTIVE INDEPENDENT COMMITTEE DIRECTOR (ED) DIRECTOR (NED) DIRECTOR (ID) COMMITTEE CHARTER FUNCTIONS KEY RESPONSIBILITIES POWER Executive 6 0 0 Develop a transparent Oversees the Perform oversight Management of business and implementation of management overall system of organizational policies and corporate functions and operation for CPGI management system matters decisions d for board and subsidiaries Audit 2 0 2 Develop a transparent Check all financial Performs oversight Pre-approve all audit financial management reports against its financial management plans and scope of system compliance; monitors functions work external audit Nomination 2 1 2 Determine personnel Pre-screen and shortlist Define role duties and Decide if candidates Remuneration that can act as guides candidates responsibilities possess the right and to the company’s future qualifications Compensation undertakings. Compensate Establish procedures Provide oversight over Designate amount competent personnel to develop policy remuneration of senior of remuneration to adequately for retention on executive management and attract and retain remuneration other key personnel the right individuals Risk 3 0 2 Safeguard the company Establish procedures Provides oversight on To implement Management from potential and to safeguard risk management procedures and adherent risks management from resolutions for exposed risks and addressing risks prevention of potential risks Related Party 2 0 2 Ensure that every Ensure that every Proper review, Review, evaluate Transactions Related Party Related Party evaluation, approval, and approve Related Committee Transaction is Transaction is at arm’s ratification, disclosure Party Transaction conducted in a manner length, the terms are and implementation pursuant to the that will protect the fair, and they will inure of transactions Policies and in Company and its to the best interest between the compliance with stakeholders from of the Company, Company and any legal and regulatory conflict of interest its stakeholders, of its Related Party/ requirements which may arise subsidiaries and ies as required in between the Company affiliates compliance with and its Related Parties; legal and regulatory requirements

178 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 179 CORPORATE GOVERNANCE

BOARD COMMITTEE MEMBERS

EXECUTIVE COMMITTEE NOMINATION, COMPENSATION AND REMUNERATION COMMITTEE

DATE OF NO. OF NO. OF MEETINGS LENGTH OF SERVICE IN DATE OF NO. OF NO. OF MEETINGS LENGTH OF SERVICE IN OFFICE NAME APPOINTMENT MEETINGS HELD ATTENDED % THE COMMITTEE OFFICE NAME APPOINTMENT MEETINGS HELD ATTENDED % THE COMMITTEE Chairman Jose E.B. Antonio June 14, 2018 4 4 100 1 yr Chairman Jose E.B. Antonio June 14, 2018 4 4 100 1 yr Member (ED) John Victor R. Antonio June 14, 2018 4 4 100 1 yr Member (ED) Jose Marco R. Antonio June 14, 2018 4 2 50 1 yr Member (ED) Jose Marco R. Antonio June 14, 2018 4 4 100 1 yr Member (ID) Jose L. Cuisia, Jr. June 14, 2018 4 4 100 1 yr Member (ED) Jose Roberto R. Antonio June 14, 2018 4 4 100 1 yr Member – Ritchelle T. Cordero June 14, 2018 4 4 100 1 yr Non Board HR Head Member (ED) Jose Carlo R. Antonio June 14, 2018 4 4 100 1 yr Member (ID) Carlos C. Ejercito June 14, 2018 4 4 100 1 yr Member (ED) Rafael G. Yaptinchay June 14, 2018 4 4 100 1 yr Member – Atty. Isabelita Ching June 14, 2018 4 4 100 1 yr Non Board Sales AUDIT COMMITTEE

DATE OF NO. OF NO. OF MEETINGS LENGTH OF SERVICE IN OFFICE NAME APPOINTMENT MEETINGS HELD ATTENDED % THE COMMITTEE RISK MANAGEMENT COMMITTEE

Chairman (ID) Stephen CuUnjieng June 14, 2018 4 4 100 1 yr DATE OF NO. OF NO. OF MEETINGS LENGTH OF SERVICE IN OFFICE NAME APPOINTMENT MEETINGS HELD ATTENDED % THE COMMITTEE Member (ID) Carlos C. Ejercito June 14, 2018 4 4 100 1 yr Chairman (ID) Jose L. Cuisia, Jr. June 14, 2018 4 4 100 1 yr Member (ED) Jose Carlo R. Antonio June 14, 2018 4 4 100 1 yr Member (ED) Jose E.B. Antonio June 14, 2018 4 4 100 1 yr Member (ED) Jose Marco R. Antonio June 14, 2018 4 4 100 1 yr Member (ID) Jose Carlo R. Antonio June 14, 2018 4 4 100 1 yr Member (NED) Ricardo P. Cuerva June 14, 2018 4 4 100 1 yr Member (ID) Stephen T. CuUnjieng June 14, 2018 4 4 100 1 yr Member (ID) Carlos C. Ejercito June 14, 2018 4 4 100 1 yr The Audit Committee shall have the following functions: i. A definitive timetable within which the accounting Member (ED) Rafael G. Yaptinchay June 14, 2018 4 4 100 1 yr a) Check all financial reports against its compliance with both system of the Company will be one hundred percent the internal financial management handbook and pertinent (100%) compliant with the International Accounting accounting standards, including regulatory requirements; Standards (IAS); and b) Perform oversight financial management functions ii. An accountability statement that will specifically identify RELATED PARTY TRANSACTIONS COMMITTEE

specifically in the areas of managing credit, market, officers and personnel directly responsible for the DATE OF NO. OF NO. OF MEETINGS LENGTH OF SERVICE IN liquidity, operational, legal and other risks of the Company, accomplishment of such task; OFFICE NAME APPOINTMENT MEETINGS HELD ATTENDED % THE COMMITTEE and crisis management; iii. Regularly review and improve, if necessary, the Chairman (ID) Carlos C. Ejercito June 14, 2018 1 1 100 1 yr c) Pre-approve all audit plans, scope and frequency one (1) Company’s Controller’s Policies and Procedures Member (ID) Jose L. Cuisia, Jr. June 14, 2018 1 1 100 1 yr month before the conduct of external audit; Manual, in order to provide for a transparent financial d) Perform direct interface functions with internal and management system that will ensure the integrity of Member (ED) Rafael G. Yaptinchay June 14, 2018 1 1 100 1 yr external auditors; internal control activities throughout the Company and Member (ED) Jose Marco R. Antonio June 14, 2018 1 1 100 1 yr e) Elevate to prevalent international standard the accounting the entire organization; and and auditing processes, practices and methodologies of iv. Recommend to the stockholder s the external auditor of Member (ED) Jose Carlo R. Antonio June 14, 2018 1 1 100 1 yr the Company, and develop the following in relation to this the Company. duty:

180 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 181 CORPORATE GOVERNANCE

BOARD COMMITTEE MEMBERS

WORK DONE AND ISSUES ADDRESSED BY THE COMMITTEES COMMITTEE PROGRAMS

NAME OF COMMITTEE WORK DONE ISSUES ADDRESSED NAME OF COMMITTEE PLANNED PROGRAMS ISSUES TO BE ADDRESSED Executive Approval of JV’s, acquisition of land, availment of loans and real estate mortgage/s, approval Executive The Board has created an internal self-rating system that can measure the performance of the Board and of several project alunchesand endorsement to the board of placement and subscription Audit Management in accordance with the criteria provided for in its Corporate Governance Manual. transactions Nomination Audit Assisted the Board in its oversight functions Reviewed and approved the 2016 Audited The Board of Directors and its Senior Management has established and implemented this Manual on Corporate Remuneration specifically relating to the financial reports, Financial Statements of the Company as Governance in accordance with the SEC Revised Code of Corporate Governance. The rules embodied in this statements and soundness of the Company prepared by the external auditors Sycip, Gorres, Risk manual has been used as reference by the members of the Board and Management. and compliance with legal and regulatory Velayo & Co. (SGV), as well as the quarterly Management The following are the guidelines for the effective implementation of this Manual: requirements. unaudited financial statements. The Committee Related Party gave its recommendation on the reappointment Transactions A. COMMUNICATION PROCESS of SGV as the Company’s external auditors for Committee 2016 and the corresponding audit fee structure. (1) The Manual shall be available for inspection by any stockholder of the Company at reasonable hours on The Committee likewise reviewed and/or business days. approved specific matters presented by the (2) All directors, executives, and division and department heads of the Company are tasked to ensure the Internal Audit Division and SGV. thorough dissemination and communication of the Manual to all employees and related parties and to enjoin compliance in the process. Nomination, The Committee pre-screened and The Nomination and Remuneration Committee (3) An adequate number of printed copies of this Manual must be reproduced by the Human Resources Compensation shortlisted all candidates nominated considered the following in the determination Department, or its equivalent, of the Company, with a minimum of at least one (1) hard copy of the and to become a member of the Board of of the number of directorships in other Manual for every department. Remuneration Directors, in accordance with the minimum corporations for the members of the Board: qualifications and disqualifications set forth (a) The nature of the business of the B. TRAINING PROCESS in the Company’s Regulations. corporation in which the director is also a (1) If necessary, funds shall be allocated for the purposes of conducting an orientation program or workshop member of the board; to operationalize this Manual (b) The age of the director; (2) A director shall, before assuming as such, be required to attend a seminar on corporate governance which (c) The number of directorships or active shall be conducted by a duly recognized private or government institute. memberships and officers in other corporations or organizations; and C. MONITORING AND ASSESSMENT (d) Possible conflict of interest. (1) Each Committee shall report regularly to the Board of Directors. Nominate competent members only (2) The Compliance Officer shall establish an evaluation system to determine and measure compliance Risk It reviewed departmental policies, as well The Risk Management Committee provided with this Manual. Any violation thereof shall subject the responsible officer to employee to the penalty Management as the adequacy and effectiveness of the a report to the Board on its assessment of the provided under Article 11 of the Manual. Company’s enterprise risk management effectiveness of the risk management process (3) The establishment of such evaluation system, including the features thereof, shall be disclosed in the process. and reviews reports from Internal Audit (IA) Company’s Annual Report (SEC Form 17-A). The adoption of such performance evaluation system must be regarding the independent validation of covered by Board approval. compliance with the approved ERM Policy and (4) This Manual shall be subject to annual review, unless the same frequency is amended by the Board. assessment of current state of ERM framework. (5) All business processes and practices being performed within any department or business unit of the Company that are not consistent with any portion of this Manual shall be revoked, unless upgraded to compliant extent. Related Party It will ensure that every Related Party Transaction is conducted in a manner that will protect Transactions the Company and its stakeholders from conflict of interest which may arise between the Committee Company and its Related Parties.

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RISK MANAGEMENT SYSTEM

The Company’s philosophy of risk management has its foundation in the concept RISK POLICY RISK EXPOSURE RISK MANAGEMENT POLICY OBJECTIVE that taking material risks is required in order to seek rewards and to fulfill the Business Development: • Adequate checklist of items: Zoning, legally permissible, financially Site Acquisition Company’s multi‐faceted mission. However, these risks should be assessed in (a) Company • Compliance Requirements viable, and negotiation tie-up with Corporate Legal order to ensure that effective mitigation strategies are employed to the greatest The Company’s philosophy of risk • Meet demand and expansion • Continuous improvement on the Business Development’s systems extent possible. Mitigation strategies should consider transferring or insuring management has its foundation in the requirements processes and procedures. risk, reducing the likelihood of the risk occurring, reducing the severity of the concept that taking material risks is Project and Product Development/ • Adequate planning, monitoring, execution (e.g. especially on securing Timely and Quality risk should it occur, avoiding the risk altogether, or accepting the risk, while required in order to seek rewards and Design: Actual over budget permits and licenses). Project Delivery continuing to monitor it to ensure it stays within the Company’s risk appetite. to fulfill the Company’s multi‐faceted • Timely delivery of the Product • Adherence to International/Best Standards/Practices mission. However, these risks should be • Quality Product • Continuous improvement on the Project and Product systems “The Risk Management Committee assists the Board of Directors (Board) in fulfilling its assessed in order to insure that effective • Actual Product commensurate with processes and procedures. the Marketed product responsibility for oversight of the organization’s risk management processes. It reviews mitigation strategies are employed and endorses to the Board changes or amendments to the ERM Policy, as well as the to the greatest extent possible. Pre-Sales Management: • Adherence to Company’s systems processes and procedures. Generate/Produce adequacy and effectiveness of the Company’s enterprise risk management process. The Mitigation strategies should consider • Timely deployment of Sales Agents • Discovering and penetrating new markets (e.g. Locally and Sales Risk Management Committee provides a report to the Board on its assessment of the transferring or insuring risk, reducing • Sales Support (Training, financial, Internationally) effectiveness of the risk management process and reviews reports from Internal Audit actual deployment) • Continuous improvement on the Pre-Sales systems processes and the likelihood of the risk occurring, • Achieve targeted Sales procedures. (IA) with regard to the independent validation of compliance with the approved ERM reducing the severity of the risk should Policy and assessment of current state of ERM framework” it occur, avoiding the risk altogether, or Documents and Collections: • Adherence to Company’s systems processes and procedures. Complete documents • Completeness and timely acquisition • Adequate monitoring of documents and collections accepting the risk, while continuing to and availability (to client) of required • Adherence to International/Best Standards/Practices Timely collection of The Committee has conducted review of internal processes, procedures and monitor it to ensure it stays within the policies for the year 2017 and the different departments of the Company are in documents • Continuous improvement on the Documents and Collections systems payments Company’s risk appetite. • Completeness and timely collection of processes and procedures. the process of amending and formulating policies on a per department basis, payments which will be submitted to the Risk Management Committee and to be reviewed The Risk Management Committee by the Audit Committee before presentation to the Board. Inventory Management: • Adherence to Company’s systems processes and procedures. Generate/Produce assists the Board of Directors in fulfilling • Monitoring of inventory per Project • Adequate monitoring and updating of inventory data Sales its responsibility for oversight of the • Timely holding and booking of Units • Continuous improvement on the Inventory systems processes and The ERM framework, policy and plan shall be reviewed periodically given the organization’s risk management procedures. company’s current internal and external environment. Based on results of processes. It reviews and endorses to monitoring and reviews, decisions shall be made on the corporate-wide desired After-Sales Management: • Adherence to Company’s systems processes and procedures. Client Satisfaction the Board changes or amendments to • Complete and timely submission of • Adherence to International/Best Standards/Practices state of the ERM framework and how the risk management framework, policy the ERM Policy, as well as the adequacy required Notices (to Clients) • Continuous improvement on the After-Sales systems processes and and plan can be improved. These decisions shall lead to improvements in the and effectiveness of the Company’s • Proper turn-over of Units procedures. Company’s management of risk and its risk management culture. Action plans to enterprise risk management process. • Manage client complaints bridge the gaps between the current and desired states of the ERM framework The Risk Management Committee Supporting Functions: • Adherence to Company’s systems processes and procedures. Various business shall be developed. provides a report to the Board on its • Inefficiencies and ineffectiveness in • Adherence to International/Best Standards/Practices objectives relating to assessment of the effectiveness of various supporting business processes • Continuous improvement on the Company’s systems processes and compliance, reporting The Committee shall endeavor to conduct review of internal processes quarterly the risk management process and procedures. and operations for the ensuing year. reviews reports from Internal Audit (IA) Inherent Risks: • Adequate planning to ensure inherent risk is manage and minimize Sustainability and regarding the independent validation • Significant down-turn of economy of based on the risk appetite of the Company Business Continuity of compliance with the approved ERM certain targeted Markets • Timely monitoring of significant events which may affect the Policy and assessment of current state • Virus epidemic breakthrough production of sales. of ERM framework. • Economic down-turn of the • Business continuity and flexibility to run operations to other targeted Philippines Markets • Natural Calamities and Environmental Issues

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RISK MANAGEMENT SYSTEM

RISK POLICY

(b) Group

RISK EXPOSURE RISK MANAGEMENT POLICY OBJECTIVE Business Development: • Adequate checklist of items: Zoning, legally permissible, financially Site Acquisition • Compliance Requirements viable, and negotiation tie-up with Corporate Legal • Meet demand and expansion • Continuous improvement on the Business Development’s systems requirements processes and procedures. Project and Product Development/ • Adequate planning, monitoring, execution (e.g. especially on securing Timely and Quality Design: Actual over budget permits and licenses). Project Delivery • Timely delivery of the Product • Adherence to International/Best Standards/Practices • Quality Product • Continuous improvement on the Project and Product systems • Actual Product commensurate with processes and procedures. the Marketed product Pre-Sales Management: • Adherence to Company’s systems processes and procedures. Generate/Produce • Timely deployment of Sales Agents • Discovering and penetrating new markets (e.g. Locally and Sales • Sales Support (Training, financial, Internationally) actual deployment) • Continuous improvement on the Pre-Sales systems processes and • Achieve targeted Sales procedures. Documents and Collections: • Adherence to Company’s systems processes and procedures. Complete documents • Completeness and timely acquisition • Adequate monitoring of documents and collections and availability (to client) of required • Adherence to International/Best Standards/Practices Timely collection of documents • Continuous improvement on the Documents and Collections systems payments • Completeness and timely collection of processes and procedures. payments Inventory Management: • Adherence to Company’s systems processes and procedures. Generate/Produce • Monitoring of inventory per Project • Adequate monitoring and updating of inventory data Sales • Timely holding and booking of Units • Continuous improvement on the Inventory systems processes and procedures. After-Sales Management: • Adherence to Company’s systems processes and procedures. Client Satisfaction • Complete and timely submission of • Adherence to International/Best Standards/Practices required Notices (to Clients) • Continuous improvement on the After-Sales systems processes and • Proper turn-over of Units procedures. • Manage client complaints Supporting Functions: • Adherence to Company’s systems processes and procedures. Various business • Inefficiencies and ineffectiveness in • Adherence to International/Best Standards/Practices objectives relating to various supporting business processes • Continuous improvement on the Company’s systems processes and compliance, reporting procedures. and operations Inherent Risks: • Adequate planning to ensure inherent risk is manage and minimize Sustainability and • Significant down-turn of economy of based on the risk appetite of the Company Business Continuity certain targeted Markets • Timely monitoring of significant events which may affect the • Virus epidemic breakthrough production of sales. • Economic down-turn of the • Business continuity and flexibility to run operations to other targeted Philippines Markets • Natural Calamities and Environmental Issues

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RISK MANAGEMENT SYSTEM

RISK POLICY

(c) Minority Shareholders The Company recognizes that the most cogent proof of (4) Right to Information 6. Appraisal Right corporate governance is that which is visible to the eyes of its (a) The shareholders shall be provided, upon request, The shareholders shall have appraisal right or the right shareholders. Therefore, the provisions hereunder are issued with periodic reports which disclose personal and to dissent and demand payment of the fair value of their for the guidance of all internal and external parties concerned, professional information about the directors and shares in the manner provided for under Section 82 of as governance covenant between the Company and all its officers of the Company, and certain other matters the Corporation Code of the Philippines, under any of shareholders. such as the directors’ and officers’ holdings of the the following circumstances: Company’s shares, dealings with the Company, (a) In case an amendment to the Articles of A. For the protection of shareholders and minority interests, relationships among directors and key officers of the Incorporation of the Company has the effect of the Board shall be committed to respect the following Company, and the aggregate compensation of the changing or restricting the rights of any stockholders rights of the stockholders: directors and officers. or class of shares, or of authorizing preferences in any (1) Voting Right (b) The minority shareholders shall have the right to respects superior to those of outstanding shares of (a) Shareholders shall have the right to elect, remove propose the holding of a stockholder’s meeting, any class, or of extending or shortening the term of and replace directors and vote on certain corporate and the right to propose items in the agenda of the corporate existence; acts, in accordance with the Corporation Code. meeting, provided that the items in the agenda are (b) In case of sale, lease, exchange, transfer, mortgage, (b) Cumulative voting shall be used in the election of for legitimate business purposes. Legitimate business pledge or other disposition of all or substantially all of directors. purposes shall include information on matters under the corporate property and assets as provided in the (c) A director shall not be removed without cause, if it the immediately succeeding subsection. Corporation Code; and will deny minority shareholders of representation in (c) The minority shareholders shall have access to any (c) In case of merger or consolidation. the Board. and all information relating to matters for which the management is accountable for and should disclose B. It shall be the duty of the Board to promote shareholder (2) Pre-Emptive Right to the shareholders. rights, remove impediments to exercise of shareholders’ All stockholders shall have pre-emptive rights, unless rights, and allow possibilities to seek redress for violation the same is denied in the Articles of Incorporation, or an 5. Right to Dividends of their rights. The Board shall encourage the exercise of amendment thereto, of the Company. All stockholders (a) All shareholders shall have the right to receive shareholders’ voting rights and the solution of collective shall have the right to subscribe to the capital stock of dividends, subject to the discretion of the Board. action problems through appropriate mechanisms. The the Company. The Articles of Incorporation shall lay (b) The Company shall be compelled to declare Board shall pave the way for the electronic filing and down the specific rights and powers of the shareholders dividends when its retained earnings shall be in distribution of shareholder information necessary to make with respect to the particular shares they hold, all of excess of one hundred percent (100%) of its paid-in informed decisions, subject to legal constraints. which shall be protected by law so long as they shall not capital stock except in the following cases: be in conflict with the Corporation Code. (b.1) When justified by definite corporate expansion All shareholders have one vote per share; so, minority projects or programs approved by the Board, or shareholders voting power is not truncated. (3) Power of Inspection (b.2) When the Company is prohibited under any Subject to reasonable restrictions in accordance loan agreement with any financial institution with the Corporation Code and jurisprudence, all or creditor, whether local or foreign, from shareholders shall be allowed to inspect the corporate declaring dividends without its consent, and books and records of the Company, including minutes such consent has not been secured, or of Board meetings and stock registries, and shall be (b.3) When it can be clearly shown that such furnished with annual reports, including financial retention is necessary under special statements, without cost. circumstances obtaining in the Company, such as when there is a need for a special reserve for probable contingencies.

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RISK MANAGEMENT SYSTEM

CONTROL SYSTEM SET UP CONTROL SYSTEM SET UP

(a) Company (b) Group

RISK MANAGEMENT POLICY (MONITORING RISK MANAGEMENT AND CONTROL RISK MANAGEMENT POLICY (MONITORING RISK MANAGEMENT AND CONTROL RISK EXPOSURE AND MEASUREMENT PROCESS) (STRUCTURES, PROCEDURES, ACTIONS TAKEN) RISK EXPOSURE AND MEASUREMENT PROCESS) (STRUCTURES, PROCEDURES, ACTIONS TAKEN) Business Development Inability to meet the demands of • Adequate checklist of items: Zoning, legally permissible, financially viable, Business Development Inability to meet the demands of • Adequate checklist of items: Zoning, legally permissible, financially viable, the Market and requirements for and negotiation tie-up with Corporate Legal the Market and requirements for and negotiation tie-up with Corporate Legal expansion which may result to • Continuous improvement on the Business Development’s systems expansion which may result to • Continuous improvement on the Business Development’s systems opportunity loss. processes and procedures. opportunity loss. processes and procedures. Project/Product Potential issues on the costs, • Adequate planning, monitoring, execution (e.g. especially on securing Project/Product Potential issues on the costs, • Adequate planning, monitoring, execution (e.g. especially on securing development and design schedules and actual product permits and licenses). development and design schedules and actual product permits and licenses). which may result to increase in • Adherence to International/Best Standards/Practices which may result to increase in • Adherence to International/Best Standards/Practices expenses. • Continuous improvement on the Project and Product systems processes expenses. • Continuous improvement on the Project and Product systems processes and procedures. and procedures. Pre-sales Management Potential loss of production/sales • Adherence to Company’s systems processes and procedures. Pre-sales Management Potential loss of production/sales • Adherence to Company’s systems processes and procedures. which may result to negative net- • Discovering and penetrating new markets (e.g. Locally and Internationally) which may result to negative net- • Discovering and penetrating new markets (e.g. Locally and Internationally) income. • Continuous improvement on the Pre-Sales systems processes and income. • Continuous improvement on the Pre-Sales systems processes and procedures. procedures. Documents and Potential issues on completeness • Adherence to Company’s systems processes and procedures. Documents and Potential issues on completeness • Adherence to Company’s systems processes and procedures. Collections and accuracy of documents and • Adequate monitoring and updating of inventory data Collections and accuracy of documents and • Adequate monitoring and updating of inventory data collection of payments • Continuous improvement on the Document and Collection’s systems collection of payments • Continuous improvement on the Document and Collection’s systems processes and procedures. processes and procedures. Inventory Management Potential issues on the efficiency • Adherence to Company’s systems processes and procedures. Inventory Management Potential issues on the efficiency • Adherence to Company’s systems processes and procedures. and effectiveness on the inventory • Adequate monitoring and updating of inventory data and effectiveness on the inventory • Adequate monitoring and updating of inventory data of projects • Continuous improvement on the Inventory systems processes and of projects • Continuous improvement on the Inventory systems processes and procedures. procedures. After-Sales Management Potential issues on client • Adherence to Company’s systems processes and procedures. After-Sales Management Potential issues on client • Adherence to Company’s systems processes and procedures. satisfaction • Adequate monitoring and updating of inventory data satisfaction • Adequate monitoring and updating of inventory data • Continuous improvement on the Inventory systems processes and • Continuous improvement on the Inventory systems processes and procedures. procedures. Supporting Functions Potential issues on the efficiency • Adherence to Company’s systems processes and procedures. Supporting Functions Potential issues on the efficiency • Adherence to Company’s systems processes and procedures. and effectiveness of various • Adequate monitoring and updating of inventory data and effectiveness of various • Adequate monitoring and updating of inventory data business processes • Continuous improvement on the Inventory systems processes and business processes • Continuous improvement on the Inventory systems processes and procedures. procedures.

190 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 191 CORPORATE GOVERNANCE

RISK MANAGEMENT SYSTEM

CONTROL SYSTEM SET UP

(c) Committee

COMMITTEE/UNIT CONTROL MECHANISM DETAILS OF ITS FUNCTIONS Risk Management Oversight Control by assisting the 1. Oversight function Committee Board of Directors 2. Formulate, review and endorse to the Board an ERM Policy (thru the help of the Risk Management Department) 3. Review adequacy and effectiveness of Risk Management Processes (thru the help of the independent validation of Internal Audit Department) Audit Committee Financial Oversight Control by Perform oversight financial management functions specifically in the areas assisting the Board of Directors of managing credit, market, liquidity, operational, legal and other risks of the Company, and crisis management

192 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 193 CORPORATE GOVERNANCE

INTERNAL AUDIT AND CONTROL

1) Internal Control System Thus, it is essential that Management provide all members of INTERNAL AUDIT the Board with accurate and timely information that would Role, Scope and Internal Audit Function enable the Board to comply with its responsibilities to the “Internal control is a process, effected INDICATE WHETHER IN- stockholders. HOUSE OR OUTSOURCE NAME OF CHIEF by the Company’s board of directors, Management shall formulate, under the supervision of the INTERNAL AUDIT INTERNAL AUDITOR/ Audit Committee, the rules and procedures on financial ROLE SCOPE FUNCTION AUDITING FIRM REPORTING PROCESS management, and other personnel, reporting and internal control in accordance with the To provide independent and objective To assist the Board of Directors In-house Internal Edwin A. Aquino • Directly reporting to the assurance and consulting services to thru the established Board Audit Audit Board Audit Committee designed to provide reasonable assurance following guidelines: add value and improve the Company’s Committee on the assessment (1) The extent of its responsibility in the preparation of operations, reporting and compliance. and evaluation of the adequacy • Administratively to the regarding the achievement of objectives the financial statements of the corporation, with the and effectiveness of the CEO/President or CFO (as relating to operations, reporting, and corresponding delineation of the responsibilities that Company’s governance, risk the case maybe) management process and system pertain to the external auditor, should be clearly explained; of internal controls. compliance.” (2) An effective system of internal control that will ensure the integrity of the financial reports and protection of the • Geared to the achievement of objectives in one or more The Board Audit Committee Charter provides: Ensure that the Internal Auditors have free and full access to all assets of the Company for the benefit of all stockholders categories – operations, reporting and compliance Company’s records, properties and personnel relevant to and and other stakeholders shall be maintained; • A process consisting of ongoing tasks and activities – a The Committee shall establish and identify the reporting lines required by its function and that the IAD shall be free from (3) On the basis of the approved audit plans, internal audit means to an end, not an end itself of the CAE so that the reporting levels allow the IAD to fulfill interference in determining its scope, performing its work and examinations should cover, at the minimum, the evaluation • Effected by people – not merely about policy and its responsibilities and maintain its independence (e.g. IAD communicating its results. of the adequacy and effectiveness of controls that cover procedure manuals, systems, and forms, but about people functionally and administratively reports to the Committee the corporation’s governance, operations and information and the actions they take at every level of an organization and President or CFO, respectively).” systems, including the reliability and integrity of financial to affect internal control and operational information, effectiveness and efficiency • Able to provide reasonable assurance – but not absolute of operations, protection of assets, and compliance with assurance, to the Company’s Board of Directors, Executive contracts, laws, rules and regulations; Committee and Senior Management Progress against Plans, Issues, Findings and Examination Trends The relationship among progress, plans, (4) The Company shall consistently comply with the financial • Adaptable to the Company structure – flexible in issues and findings should be viewed as requirements of the Commission; PROGRESS AGAINST PLANS RISK MANAGEMENT AUDIT PLAN application for the Company or for a particular subsidiary, an internal control review cycle which (5) The external auditor should be rotated or changed every group, operating unit, or business process Issues • Varying execution of Management on the involves the following step-by-step five (5) years or earlier, or the signing partner of the external established policies and procedures activities: auditing firm assigned to the Company, should be changed • Varying assumptions Management of sound “The Audit Committee assists the Board of Directors fulfill with the same frequency. internal controls/best practices its responsibility for oversight of the Company’s corporate • Varying interpretations and implementation of 1) Preparation of an audit plan inclusive governance processes. This entails an understanding of the Management on international standards. of a timeline and milestones; The Committee endeavors to conduct quarterly review for the risks, control and financial reporting issues inherent to the Findings • Business Process Improvement (encompassing 2) Conduct of examination based on ensuing year. Company.” internal controls and risk management embedded the plan; within the Business process) 3) Evaluation of the progress in the At least annually, the Audit Committee, to obtain • Lack of formal policies and procedures The Board is primarily accountable to the stockholders. It implementation of the plan; management’s assurance on the state of internal controls, Examination Trends Year to Year basis should provide them with a balanced and comprehensible 4) Documentation of issues risk management and corporate governance processes, assessment of the corporation’s performance, position and and findings as a result of the the Committee relies on the expertise and knowledge prospects on a quarterly basis, including interim and other examination; of Management, the Internal Auditors and External reports that could adversely affect its business, as well as 5) Determination of the pervasive (independent) Auditors. reports to regulators that are required by law. issues and findings (“examination trends”) based on single year result and/or year-to-year results; 6) Conduct of the foregoing procedures on a regular basis.

194 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 195 CORPORATE GOVERNANCE

INTERNAL AUDIT AND CONTROL

Audit Control Policies and Procedures

POLICIES & PROCEDURES IMPLEMENTATION Various policies, procedures, memorandum Implemented and implementing guidelines on reporting, compliance and operations (w/c includes authorization, receipts and disbursements and safeguarding of assets).

Mechanisms and Safeguards

AUDITORS AUDITORS (INTERNAL AND EXTERNAL) FINANCIAL ANALYSTS INVESTMENT BANKS RATING AGENCIES REPORTING PROCESS External Auditors directly reports All requested information All requested information The Company undertook an • Directly reporting to the to the Board Audit Committee are provided with utmost are provided with utmost ISO-QMS exercise last 2012 Board Audit Committee care and honesty; the care and honesty; the with Neville Clarke and is Internal Auditors directly reports Company does not Company does not interfere on-going with the process • Administratively to the to the Board Audit Committee interfere to influence the to influence the Bank’s to achieve certification. CEO/President or CFO (as and administratively to the Analyst’s conclusions conclusions the case maybe) President/CEO (as the case maybe)

The Chairman and Compliance Officer of the Company shall attest to the Company’s compliance with the SEC Code of Corporate Governance.

The Board of Directors, Management, Officers and employees of commit themselves to the principles and best practices of governance contained in our Manual of Corporate Governance as a guide in the attainment of its corporate goals. The Corporation shall make a continuing effort to create awareness of good corporate governance within the organization.

The Board of Directors is the supreme authority in matters of governance and managing the regular and ordinary business of the Corporation. Within their chartered authority, the directors acting as a board have the fullest powers to regulate the concerns of the Corporation according to their best judgment.

196 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 197 CORPORATE GOVERNANCE

ROLE OF STAKEHOLDERS

Company’s policy and activities relative to the following: It is the policy of the Company to promote discipline in the 5. During the hearing, the erring employee shall be given organization by taking corrective action as may be needed ample opportunity to answer the allegations against him, POLICY ACTIVITIES for the protection of all employees and clients, Company’s to confront any or all the witness, and to present evidence Customers' welfare Commit to producing high quality real estate that is of Sales Events properties and interests. that may strengthen his explanations. The employee may global quality avail of the assistance of any representative of his choice to Supplier/contractor selection practice Ability to deliver quality products in a timely manner Major purchases are generally sent out for bids before These rules were prepared to ensure fair and consistent defend him, if he so desires. decision making treatment and constructive actions any employee who has 6. The HR Administrative & Discipline Committee shall Environmentally friendly value-chain Adhere to best practices, timely and high-quality product CSR and sales activities made a mistake. document the proceedings and the document shall form services part of the record case. After having ascertained all relevant Community interaction Involve local stakeholders where possible CSR activities OBJECTIVES facts of the case and evaluated the evidences presented, Anti-corruption programmes and The company as a rule does not indulge in corrupt The company as a rule does not indulge in corrupt 1. To instill awareness on proper behavior, attitude, and the Committee will submit its report to Management procedures practices practices conduct as employees of Century Properties Group, Inc. within 7 working days after conclusion of the investigation Safeguarding creditors' rights Transparency in financial dealings Meet financial & other covenants set by creditors 2. To serve as guidelines in handling disciplinary cases for final resolution. to ensure fair, consistent, and uniform imposition of 7. All cases involving pilferage of Company property or gross disciplinary actions. dishonesty or misuse of office/position or other criminal The CSR is part of the Company’s annual report. company offers insurance and other above-industry standard offenses shall be under the jurisdiction of the HR Head Company’s policy for its employees’ safety, health, and benefits such as transportation allowance, communication GENERAL POLICIES AND PROCEDURES or his designate in close coordination with Security and welfare allowances, bonuses and other incentives. Procedures the erring employee’s Head. The employee concerned 1. The Manager is responsible for reporting to HRD any shall be placed under preventive suspension immediately The company provides a broad competitive range of benefits On top of the benefits provided for under government offenses committed by th employee. No employee shall be if warranted by the circumstances and if his continuous in order to promote the health and general well-being of its policies, the Company provides the following benefits to all its excused from appropriate actions or penalties contained presence poses a serious and imminent threat to the life or employees. Besides the government mandated benefits, the employees: herein, on the reason of ignorance of the rules and property of the company or his co-employees. regulations stated in this Code, as well as any revisions in 7.1 Preventive suspension shall be for 30-day but not more the future. than 120 working days depending on the gravity of the BENEFITS EXECUTIVE DIRECTORS MANAGEMENT PROFESSIONALS (RANK & FILE) EMPLOYEES 2. Upon receipt of the report, HRD shall issue a memorandum offense. HMO (under Maxicare) Up to Php500,000 per sickness per year Up to Php300,000 per sickness per year Up to Php120,000 per sickness per year indicating the nature of the charge to the employee 7.2 Upon service of the preventive suspension or Life Insurance (under Sun Life Php1,500,000.00 per officer Php 750,000.00 per officer Php 150,000.00 per officer concerned. The employee shall explain his side or defend suspension notices, the employee shall turn-over all Insurance) himself in writing within 72 hours. Failure or refusal of the tools and equipment to his immediate superior. The employee to comply within 72 hours shall be deemed employee shall prepare himself an inventory of items as a waiver of his right to present evidence on his behalf. turned over and duly confirmed by his immediate DEPARTMENT IN CHARGE FOR The company’s compensation policy The company may then proceed to take on appropriate superior and the HR Head or his designate. TRAINING PROGRAM TRAINING ATTENDEES is based on the firm’s profitability. action/s without such employee’s evidence. 8. Suspended employees shall be prohibited from entering Job Orientation and On- Human Resources All newly-hired employees For rewards and adjustments boarding Seminar 3. Upon receipt of the employee’s explanation, the HR the Company premises during the period of suspension. in compensation, the company Administrative & Discipline Committee shall conduct In case of important/emergency matters which the Code of Conduct and Ethics Human Resources / Legal All Employees implements KPIs KRAs to facilitate and updates an impartial and thorough investigation. The HR employee must attend to inside the Company premises, a the rate of adjustments based on Administrative & Discipline Committee shall be composed prior clearance must be secured from the HR Head or his Project Awareness Seminar Human Resources All sales and documentations performance employees of representatives from HRD, Audit, Legal, Department designate concerned. Management reserves its rights to Head/Manager, the employee’s immediate superior. The provide a Security escort, if necessary. Sales Documentation Legal All sales and documentations Our Company requires that we employees HRD Head or his designate shall act as Chairperson of the 9. All documents/records pertaining to the case shall be comfort ourselves in accordance with Committee. For cases involving property and security, there included in the 201 file of the employee. Titling Process Seminar Title Management Group All sales and documentations a high standard corporate conduct employees shall be additional members representing Finance and appropriate to our Company’s standing Security. Data Privacy Laws Compliance All Employees in the corporate community. 4. A hearing of the case shall be scheduled within reasonable Corporate Governance Training Service Providers - Annually All Directors and Senior Officers time from issuance of the memorandum.

198 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 199 CORPORATE GOVERNANCE

DISCLOSURE AND TRANSPARENCY

Ownership Structure AMOUNT OF Holding 5% shareholding or more DUE FROM RELATED PARTIES 2018 2017 TRANSACTION TERMS AND CONDITIONS Ultimate Parent 161,480,105 235,324,180 (73,844,075) Noninterest bearing, due and NUMBER OF SHARES PERCENT BENEFICIAL OWNER demandable, unsecured, no Century Properties Inc 7,376,420,681 63.59% CPI impairment Stockholders 160,320,970 153,076,337 7,24 4,633

NUMBER OF INDIRECT SHARES / THROUGH 394,354,508 491,245,948 NAME OF SENIOR MANAGEMENT NUMBER OF DIRECT SHARES (NAME OF RECORD OWNER) % OF CAPITAL STOCK NA NA NA NA

TOTAL AMOUNT OF DUE TO RELATED PARTIES 2018 2017 TRANSACTION TERMS AND CONDITIONS Ultimate Parent 37,070,486 – (73,844,075) Noninterest bearing, due and External Auditor’s fee demandable, unsecured Stockholders 19,175,305 19,175,305 – NAME OF AUDITOR AUDIT FEE NON-AUDIT FEE Other affiliates 42,329,407 28,995,726 13,333,681 SGV and Co. Php 3,600,000.00 inclusive of VAT N.A. 98,575,198 48,171,031 Medium of Communication The investing public can reach us through our Investor Relations department for The effects of the related party transactions are shown under the following accounts information and assistance. in the consolidated financial statements: • Annual Briefings and One-on-one Meetings, as needed • Property Tours and Site Visits All related party transactions are fully disclosed to the Board of Directors and are done • Roadshows and Conferences in the regular course of business and conducted on an arm’s length basis, negotiated • Media Briefings based on prevailing competitive commercial terms. None of the Company’s shareholders are granted special privileges or concessions. The Board commits at all times to full disclosure of materials information dealings. It shall cause the filings of all required information through the appropriate Exchange mechanisms for listed companies and submissions to the Commission for the interest of its stockholders and other stakeholders.

Date of release of 2018 audited financial report: Audited Financial Statement – March 21, 2019 Disclosure of RPT

The Company in their regular conduct of business has entered into transactions with related parties principally consisting of advances and reimbursement of expenses, development, management, marketing, leasing and administrative service agreement.

200 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 201 CORPORATE GOVERNANCE

RIGHTS OF STOCKHOLDERS

Right to participate effectively in and vote in Annual/ Dividends

Special Stockholders’ Meetings DECLARATION DATE RECORD DATE PAYMENT DATE April 13, 2012 Cash Dividends April 27, 2012 May 24, 2012 (a) Quorum April 15, 2013 Cash Dividends April 29, 2013 May 16, 2013

April 30, 2014 Cash Dividends May 15, 2014 June 05, 2014 Quorum Required 2/3 total shareholdings present/ majority of capital stock present October 13, 2014 Stock Dividends October 27, 2014 November 14, 2014

(b) System Used to Approve Corporate Acts June 15, 2015 Cash Dividends July 3, 2015 July 16, 2015

June 22, 2016 Regular & Special Cash Dividends July 8, 2016 July 22, 2016

System Used By Poll. May 22, 2017 Regular & Special Cash Dividends June 2, 2017 June 19, 2017 Notice is given to all stockholders; Presentation of corporate acts; June 8, 2018 Regular & Special Cash Dividends June 26, 2018 July 6, 2018 Discussion through question and answer. Description Stockholders shall vote by ballot and each stockholder is entitled to cast votes in accordance with the number of shares he owns. One share is equivalent to one vote. Stockholders’ Participation

MEASURES ADOPTED COMMUNICATION PROCEDURE Stockholders are apprised of corporate acts requiring stockholders approval in the notice and agenda of meeting and information statement; Open Forum Via Question and Answer

During the meeting itself, proposed corporate acts on which stockholder approval Motion to second Stockholders are given the right to move the motion and a is sought are presented and explained to the stockholders, and questions/ corresponding second of the motion comments are solicited, received and entertained. Company policy of asking shareholders to actively c. Transfer of all or substantially all assets, which in effect Stockholders’ Rights participate in corporate decisions regarding: results in the sale of the company All Stockholders’ Rights are consistent with what is indicated in the Corporation Code.

a. Amendments to the company’s constitution The stockholders, by the affirmative vote of a majority of Dividend Policy The stockholders, by the affirmative vote of a majority of the stocks issued, outstanding and entitled to vote, may The Company declares dividends yearly, either through Cash or Stock, to shareholders the stocks issued, outstanding and entitled to vote, may authorize the transfer of all or substantially all assets of the of record, which are paid from the Company’s unrestricted retained earnings. make, alter or amend these By-Laws at any regular meeting Company at a regular or special meeting called for that or any special meeting called for that purpose as well as purpose as well as the majority of the members of the Below is the summary of CPGI’s dividend declaration for fiscal year 2015 until 2018. the majority of the members of the Board also in a meeting Board also in a meeting duly called for that purpose. duly called for that purpose. Cash Dividends The Company sends out notices to the AGM at least 21 CPGI intends to maintain an annual cash TOTAL AMOUNT OF AMOUNT OF DATE OF b. Authorization of additional shares business days prior to the scheduled meeting. FISCAL YEAR DIVIDENDS DIVIDENDS PER SHARE DECLARATION DATE OF PAYMENT dividend payment ratio for the issued The stockholders, by the affirmative vote of a majority of a. Date of sending out notices: May 4, 2018 2014 201,158,909 0.0173 June 15, 2015 July 16, 2015 and outstanding common shares of the stocks issued, outstanding and entitled to vote, may b. Date of the Annual/Special Stockholders’ Meeting: June the Company of approximately 10% of 2015 205,022,943 0.0177 June 22, 2016 July 20, 2016 authorize additional shares at a regular or special meeting 14, 2018 its consolidated net income from the called for that purpose as well as the majority of the 2016 205,065,834 0.0177 May 22, 2017 June 19, 2017 preceding fiscal year, subject to the members of the Board also in a meeting duly called for that There was no material question in relation to the Meeting requirements of applicable laws and 2017 200,000,000 0.0172 June 8, 2018 July 6, 2018 purpose. Agenda that was noted during the last Annual Stockholder’s regulations, availability of unrestricted Meeting. retained earnings and the absence of circumstances which may restrict the payment of such dividends.

202 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 203 CORPORATE GOVERNANCE

RIGHTS OF STOCKHOLDERS

Result of Annual/Special Stockholders’ and Meeting’s Resolutions last June 14, 2018 Proxy Voting Policies

RESOLUTION APPROVING DISSENTING ABSTAINING COMPANY’S POLICIES Approval of Management report for 2017 8,847,227,934 shares or 76.27% of the shares None None Execution and acceptance of Conform with by laws from outstanding capital stock proxies Approval of minutes of meeting for Annual 8,847,227,934 shares or 76.27% of the shares None None Notary Proxies not required stockholders June 22, 2016 from outstanding capital stock Submission of Proxy Should be to the corporate secretary on or before the deadline set, Confirmation of all acts of the board 8,847,227,934 shares or 76.27% of the shares None None as disclosed in the Notice from outstanding capital stock Several Proxies Allowed upon confirmation by the Corporate Secretary Election of Directors 8,847,227,934 shares or 76.27% of the shares None 66,923,226 or 0.58% of the from outstanding capital stock shares from outstanding Validity of Proxy Validated by the Corporate Secretary capital stock Proxies executed abroad Must be consularized in the place where executed Appointment of external auditors 8,847,227,934 shares or 76.27% of the shares None None from outstanding capital stock Invalidated Proxy Vote/s not considered

Validation of Proxy Conducted by the Corporate Secretary The results of voting during the most recent AGM were disclosed in the Minutes which Violation of Proxy Vote/s not considered have been disclosed before the PSE last June 14, 2018

Details of Attendance in the Annual/Special Stockholders’ Meeting Held: Sending of Notices

VOTING PROCEDURE (BY % OF SH POLICIES PROCEDURE NAMES OF BOARD MEMBERS / OFFICERS POLL, SHOW OF HANDS, ATTENDING TOTAL % OF SH TYPE OF MEETING PRESENT DATE OF MEETING ETC.) IN PERSON % OF SH IN PROXY ATTENDANCE Send notices at least 21 days prior Notices are sent by post to the last known postal address. Notice is Annual Jose EB Antonio; Jose Marco R. June 14, 2018 Motion and .0002% 76.27% 76.27% to meeting also disclosed before the PSE Antonio; Jose Carlo R. Antonio; seconding; solicitation Jose Roberto R. Antonio; Ricardo of objections Cuerva; Rafael G. Yaptinchay; Carlos Definitive Information Statements and Management Report Benedict K. Rivilla; Atty. Camille Aromas, Stephen T. CuUnjieng, Carlos C. Ejercito, Jose L. Cuisia, Jr. Number of Stockholders entitled to receive Definitive All shareholders entitled to receive Information Statements and Management Report and Other notices For the incoming ASM, we have appointed BDO Securioties to tabulate and validate the Materials votes. Date of Actual Distribution of Definitive Information Statement At least 15 days prior to AGM and Management Report and Other Materials held by market participants/certain beneficial owners One Common Share is equivalent to One Vote. Date of Actual Distribution of Definitive Information Statement At least 15 days prior to AGM and Management Report and Other Materials held by stockholders State whether CD format or hard copies were distributed CD Format are sent by post and Hard copies are made available during the meeting itself, and sent to requesting shareholders If yes, indicate whether requesting stockholders were Yes. provided hard copies

204 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 205 CORPORATE GOVERNANCE

RIGHTS OF STOCKHOLDERS INVESTORS RELATIONS PROGRAM

Notice of Annual/Special Stockholders’ Meeting include the following: The company uses email as the primary medium for all internal communication. Emails are directed only to the concerned and specific recipients, no dissemination to external addresses. All corporate records, Each resolution to be taken up deals with only one item. Yes customer data, personnel resources and legal and business records and Profiles of directors (at least age, qualification, date of first appointment, experience, and Yes documents are considered as classified information which the employees directorships in other listed companies) nominated for election/re-election. are prohibited from disseminating, unless in the ordinary course of the The auditors to be appointed or re-appointed. Yes company’s business or where approval from Department Heads are secured.

An explanation of the dividend policy, if any dividend is to be declared. Yes All press releases, official media statements and public disclosures are The amount payable for final dividends. Yes approved and authorized by the Executive Committee. The Company’s Documents required for proxy vote. Yes internal and external communication processes and policies are reviewed by the Human Resources Department, IT Department and Risk Management.

Treatment of Minority Stockholders DETAILS (1) Objectives The Company implements an Investor Relations Program that reaches POLICIES IMPLEMENTATION out to all shareholders and fully discloses all corporate material acts and Recognizes rights of the minority to influence Board Notice of meeting/Information Statement activities. The IR Officers is committed to effectively, accurate and timely composition by cumulative voting expressly states set of procedures for communicate to the investing public relevant corporate information cumulative voting with the objective of assisting investors in making appropriate investment decisions. Equal treatment of shareholders holding same class of One share one vote shares (2) Principles The Company upholds transparency and is committed to the highest standards of disclosure. The information disseminated to the investing public are accurate and timely. All corporate acts material and may have Under the Company’s Articles of Incorporation, the minority stockholders have the an impact on the company’s financial and stock price valuation are right to nominate candidates for the board of directors. properly disclosed and supported by proper reports. (3) Modes of • Annual Briefings and One-on-one Meetings, as needed Communications • Property Tours and Site Visits • Roadshows and Conferences • Media Briefings (4) Investors Relations Officer Mr. Ponciano S. Carreon Investor Relations Head Direct Line: (632) 7938928 / (632) 7938905 Mobile: +63918-8077320 Email: [email protected]

206 Century Properties Group Annual Report 2018 TURN OF THE CENTURY 207 FINANCIALS 210 Century Properties Group Annual Report 2018 TURN OF THE CENTURY – FINANCIALS 211 SyCip Gorres Velayo & Co. Tel: (632) 891 0307 BOA/PRC Reg. No. 0001, 6760 Fax: (632) 819 0872 October 4, 2018, valid until August 24, 2021 1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A), Philippines November 6, 2018, valid until November 5, 2021

- 2 -

INDEPENDENT AUDITOR’S REPORT We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated financial statements. The results of our audit The Stockholders and the Board of Directors procedures, including the procedures performed to address the matters below, provide the basis for our Century Properties Group Inc. audit opinion on the accompanying consolidated financial statements.

Adoption of PFRS 15, Revenue from Contracts with Customers Report on the Audit of the Consolidated Financial Statements Effective January 1, 2018, the Group adopted the new revenue recognition standard, PFRS 15, Revenue Opinion from Contracts with Customers, under the modified retrospective approach. The adoption of PFRS 15 is significant to our audit because this involves application of significant judgment and estimation in the We have audited the consolidated financial statements of Century Properties Group Inc. and its following areas: (1) assessment of the probability that the entity will collect the consideration from the subsidiaries (the Group), which comprise the consolidated statements of financial position as at buyer; (2) application of the output method as the measure of progress in determining real estate sales; December 31, 2018 and 2017, and the consolidated statements of comprehensive income, consolidated (3) determination of the actual costs incurred as cost of real estate sales; and (4) recognition of cost to statements of changes in equity and consolidated statements of cash flows for each of the three years in obtain a contract. the period ended December 31, 2018, and notes to the consolidated financial statements, including a summary of significant accounting policies. In evaluating whether collectability of the amount of consideration is probable, the Group considers the significance of the buyer’s initial payments in relation to the total contract price (or buyer’s equity). In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, Collectability is assessed by considering factors such as past collection history, age of receivables and the the consolidated financial position of the Group as at December 31, 2018 and 2017, and its consolidated pricing of the property. Management also regularly evaluates the history of sales cancellations and financial performance and its consolidated cash flows for each of the three years in the period ended back-outs to determine if these would affect its current threshold of buyer’s equity before commencing December 31, 2018 in accordance with Philippine Financial Reporting Standards (PFRSs). revenue recognition.

Basis for Opinion In measuring the progress of its performance obligation over time, the Group uses the output method. This method measures progress based on physical proportion of work done which requires technical We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our determination by the management specialist (third party project managers). responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in In determining the actual costs incurred to be recognized as cost of real estate sales, the Group estimates accordance with the Code of Ethics for Professional Accountants in the Philippines (Code of Ethics) costs incurred on materials, labor and overhead which have not yet been billed by the contractor. together with the ethical requirements that are relevant to our audit of the consolidated financial statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with The Group identifies sales commission after contract inception as cost of obtaining a contract. For these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is contracts that qualified for revenue recognition, the Group capitalized the total sales commission due to sufficient and appropriate to provide a basis for our opinion. the sales agent and recognizes the related liability. The Group uses percentage of completion (POC) method in amortizing sales commission consistent with the Group’s revenue recognition policy. Key Audit Matters The disclosures related to the adoption and application of PFRS 15 are included in Notes 2, 3, 14 and 31 Key audit matters are those matters that, in our professional judgment, were of most significance in our of the consolidated financial statements. audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion Audit Response thereon, and we do not provide a separate opinion on these matters. For each matter below, our We obtained an understanding of the Group’s process in implementing the new revenue recognition description of how our audit addressed the matter is provided in that context. standard. We reviewed the PFRS 15 adoption papers and accounting policies prepared by management, including revenue streams identification and scoping, and contract analysis.

For the buyer’s equity, we evaluated the management’s basis by comparing this to the historical analysis of sales collections from buyers with accumulated payments above the collection threshold. We traced the analysis to supporting documents such as the buyer’s collection report and official receipts.

*SGVFS033544* *SGVFS033544*

A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited

212 Century Properties Group Annual Report 2018 TURN OF THE CENTURY – FINANCIALS 213 - 3 - - 4 -

In determining real estate sales and cost of real estate sales, we obtained an understanding of the Group’s We (a) assessed the Group’s segmentation of its credit risk exposures based on homogeneity of credit risk processes for determining the POC under the output method and tested relevant controls. We obtained characteristics; (b) checked the methodology used in applying the simplified approach by evaluating the the certified POC reports prepared by the third party project managers and assessed their competence, key inputs, assumptions, and formulas used; (c) tested the definition of default against historical analysis capabilities and objectivity by referencing to their qualifications, experience and reporting of accounts and credit risk management policies and practices in place, (d) tested loss given default by responsibilities. For selected ongoing projects, we conducted ocular inspections, made relevant inquiries inspecting historical recoveries including the timing, related direct costs, and write-offs; (e) checked the and obtained the supporting details of POC reports showing the completion of the project construction’s forward-looking information used for overlay through statistical test and corroboration using publicly major activities. For projects with revisions in cost estimates in 2018, we obtained the approved total available information and our understanding of the Group’s lending portfolios and broader industry estimated costs and its supporting details. knowledge; and (f) tested the effective interest rate, or an approximation thereof, used in discounting the expected loss. For real estate inventories and cost of real estate sales, we obtained an understanding of the Group’s cost accumulation process and tested relevant controls. For selected projects, we traced the accumulated costs, Further, we checked the data used in the ECL models, such as the historical analysis of defaults, and including those costs incurred but not yet billed, to supporting documents such as invoices, recovery data, by reconciling data from source system reports to the data warehouse and from the data accomplishment reports from the contracts, official receipts, among others. warehouse to the loss allowance analysis/models and financial reporting systems. To the extent that the loss allowance analysis is based on credit exposures that have been disaggregated into subsets with For the recognition of cost to obtain a contract, we obtained an understanding of the sales commission similar risk characteristics, we traced or re-performed the disaggregation from source systems to the loss process. For selected contracts, we agreed the basis for calculating the sales commission capitalized allowance analysis. We also assessed the assumptions used where there are missing or insufficient data. against the portion recognized in the profit or loss. In particular, (a) the percentage of commission due We recalculated impairment provisions on a sample basis. We checked the transition adjustments and against contracts with sales agents; (b) the total commissionable amount against the related contract to reviewed the disclosures made in the consolidated financial statements based on the requirements of sell; and (c) its POC against the POC used in recognizing the related real estate sales. PFRS 9.

We test computed the transition adjustments and evaluated the disclosures made in the consolidated We involved our internal specialists in the performance of the above procedures. financial statements related to adoption of PFRS 15. Valuation of Investment Properties at Fair Value Adoption of PFRS 9, Financial Instruments The Group has investment properties which are accounted for using the fair value model and represent On January 1, 2018, the Group adopted PFRS 9, Financial Instruments. PFRS 9, which replaced PAS 39, 23% of consolidated total assets as of December 31, 2018. Fair value gains relating to those properties Financial Instruments: Recognition and Measurement, provides revised principles for classifying amounted to =376.90P million in 2018. As disclosed in Note 10 of the consolidated financial statements, financial assets and introduces a forward-looking expected credit loss model to assess impairment on debt determining the fair value of investment properties involves significant management judgment and financial assets not measured at fair value through profit or loss and loan commitments and financial estimations. It is also based on appraisal reports prepared by an external appraiser. The valuation by the guarantee contracts. The Group adopted PFRS 9 using modified retrospective approach. external appraiser depends on certain assumptions such as market rent levels, expected vacancy, discount rates and expected maintenance as well as sales and listings of comparable properties and adjustments to The Group’s adoption of the expected credit loss (ECL) model is significant to our audit as it involves the sales price based on internal and external factors. Thus, we considered this as a key audit matter. exercise of significant management judgment. Key areas of judgment include: segmenting the Group’s credit risk exposures; determining the method to estimate lifetime ECL; defining what comprises default; Audit Response determining assumptions to be used in the ECL model such as the expected life of the significant financial We evaluated the competence, capabilities and objectivity of the external appraiser. We involved our assets such as cash and cash equivalents, installment contract receivables, receivables from employees internal specialist in the review of the methodology and assumptions used in the valuation of the and agents, due from related parties, among others and nonfinancial assets such as contract assets and investment properties. We assessed and reviewed the methodology adopted by referencing common timing and amount of expected net recoveries from defaulted accounts; and incorporating forward- valuation models, and reviewed the key inputs used in the valuation, specifically the discount rate looking information in calculating ECL. applied, market rent levels, expected vacancy, interest rates and expected maintenance. We also checked the relevant information supporting the sales and listings of comparable properties and inquired from the Refer to Notes 2 and 3 of the consolidated financial statements for the disclosures in relation to the external appraiser the basis of adjustments made to the sales price. We also reviewed the disclosures adoption and application of the PFRS 9 ECL model. relating to investment properties.

Audit Response Other Information We obtained an understanding of the approved methodologies and models used for the Group’s different credit exposures and assessed whether these considered the requirements of PFRS 9 to reflect an unbiased Management is responsible for the other information. The other information comprises the information and probability-weighted outcome, the time value of money and, the best available forward-looking included in the SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report information. for the year ended December 31, 2018, but does not include the consolidated financial statements and our auditor’s report thereon. The SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and *SGVFS033544* *SGVFS033544*

A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited

214 Century Properties Group Annual Report 2018 TURN OF THE CENTURY – FINANCIALS 215 - 5 - - 6 -

Annual Report for the year ended December 31, 2018 are expected to be made available to us after the ∂ Obtain an understanding of internal control relevant to the audit in order to design audit procedures date of this auditor’s report. that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance conclusion thereon. ∂ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. In connection with our audits of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other ∂ Conclude on the appropriateness of management’s use of the going concern basis of accounting and, information is materially inconsistent with the consolidated financial statements or our knowledge based on the audit evidence obtained, whether a material uncertainty exists related to events or obtained in the audits, or otherwise appears to be materially misstated. conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s Responsibilities of Management and Those Charged with Governance for the Consolidated report to the related disclosures in the consolidated financial statements or, if such disclosures are Financial Statements inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease Management is responsible for the preparation and fair presentation of the consolidated financial to continue as a going concern. statements in accordance with PFRSs, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material ∂ Evaluate the overall presentation, structure and content of the consolidated financial statements, misstatement, whether due to fraud or error. including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and ∂ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or using the going concern basis of accounting unless management either intends to liquidate the Group or to business activities within the Group to express an opinion on the consolidated financial statements. cease operations, or has no realistic alternative but to do so. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion. Those charged with governance are responsible for overseeing the Group’s financial reporting process. We communicate with those charged with governance regarding, among other matters, the planned scope Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report We also provide those charged with governance with a statement that we have complied with relevant that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an ethical requirements regarding independence, and to communicate with them all relationships and other audit conducted in accordance with PSAs will always detect a material misstatement when it exists. matters that may reasonably be thought to bear on our independence, and where applicable, related Misstatements can arise from fraud or error and are considered material if, individually or in the safeguards. aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and As part of an audit in accordance with PSAs, we exercise professional judgment and maintain are therefore the key audit matters. We describe these matters in our auditor’s report unless law or professional skepticism throughout the audit. We also: regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of ∂ Identify and assess the risks of material misstatement of the consolidated financial statements, doing so would reasonably be expected to outweigh the public interest benefits of such communication. whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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A member firm of Ernst & Young Global Limited A member firm of Ernst & Young Global Limited

216 Century Properties Group Annual Report 2018 TURN OF THE CENTURY – FINANCIALS 217 CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - 7 -

The engagement partner on the audit resulting in this independent auditor’s report is John T. Villa. December 31 2017 (As restated - see Note 2) SYCIP GORRES VELAYO & CO. 2018 ASSETS Current Assets Cash and cash equivalents (Note 4) P=1,950,389,193 P=1,400,358,850 Receivables (Note 5) 2,047,127,253 7,541,265,718 Contract assets (Notes 2, 5 and 14) 6,827,207,071 – John T. Villa Real estate inventories (Note 6) 17,257,481,436 15,845,868,208 Partner Due from related parties (Note 15) 394,354,508 491,245,948 CPA Certificate No. 94065 Advances to suppliers and contractors (Notes 7 and 15) 2,236,124,707 1,963,978,130 SEC Accreditation No. 1729-A (Group A), Other current assets (Note 12) 1,284,425,939 1,008,973,064 December 18, 2018, valid until December 17, 2021 Total Current Assets 31,997,110,107 28,251,689,918 Tax Identification No. 901-617-005 BIR Accreditation No. 08-001998-76-2018, Noncurrent Assets February 26, 2018, valid until February 25, 2021 Noncurrent contract assets (Notes 2, 5 and 14) 1,894,555,056 – PTR No. 7332628, January 3, 2019, Makati City Noncurrent portion of installment contracts receivable (Note 5) – 2,442,243,070 Deposits for purchased land (Note 8) 1,189,477,058 1,369,569,806 March 18, 2019 Investments in and advances to joint ventures and associate (Note 9) 247,584,285 235,153,705 Investment properties (Note 10) 11,381,637,756 7,759,560,458 Property and equipment (Note 11) 1,273,790,837 1,068,560,030 Deferred tax assets (Note 26) 61,929,417 103,988,756 Other noncurrent assets (Note 12) 1,320,598,313 1,324,884,878 Total Noncurrent Assets 17,369,572,722 14,303,960,703 TOTAL ASSETS P=49,366,682,829 P=42,555,650,621

LIABILITIES AND EQUITY Current Liabilities Accounts and other payables (Note 13) P=4,989,664,627 P=3,832,132,843 Contract liabilities (Notes 2 and 14) 2,294,326,736 – Customers’ deposits (Note 14) – 2,758,601,607 Short-term debt (Note 16) 2,206,610,954 1,415,894,637 Current portion of: Long-term debt (Note 16) 5,389,150,881 3,099,349,179 Liability from purchased land (Note 18) 67,200,000 67,200,000 Due to related parties (Note 15) 98,575,198 48,171,031 Income tax payable 4,708,076 3,230,756 Total Current Liabilities 15,050,236,472 11,224,580,053 Noncurrent Liabilities Noncurrent portion of long-term debt (Note 16) 11,645,097,504 10,083,496,246 Bonds payable (Note 17) 1,505,894,698 1,500,966,910 Noncurrent portion of liability from purchased land (Note 18) 301,568,733 381,041,742 Pension liabilities (Note 25) 251,101,428 235,467,111 Deferred tax liabilities (Note 26) 2,524,519,956 2,451,358,064 Other noncurrent liabilities (Note 31) 624,797,479 423,119,032 Total Noncurrent Liabilities 16,852,979,798 15,075,449,105 Total Liabilities 31,903,216,270 26,300,029,158

(Forward)

*SGVFS033544* *SGVFS033544*

A member firm of Ernst & Young Global Limited

218 Century Properties Group Annual Report 2018 TURN OF THE CENTURY – FINANCIALS 219 - 2 - CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME December 31 2017 Years Ended December 31 (As restated - 2018 2017 2016 2018 see Note 2) REVENUES Real estate sales P=9,576,668,266 P=5,345,938,210 P=4,968,448,221 Equity (Note 19) Leasing revenue (Note 10) 407,267,202 341,658,779 337,853,830 Capital stock - P=0.53 par value Property management fee and other services (Note 22) 395,460,217 352,971,958 302,096,900 Authorized - 18,000,000,000 shares Interest income from real estate sales (Notes 5 and 14) 322,482,606 665,202,951 656,152,907 Issued - 11,699,723,690 shares P=6,200,853,553 P=6,200,853,553 10,701,878,291 6,705,771,898 6,264,551,858 Additional paid-in capital 2,639,742,141 2,639,742,141 COST AND EXPENSES Treasury shares - 100,123,000 shares (109,674,749) (109,674,749) Cost of real estate sales 5,655,403,635 2,806,481,000 2,901,250,587 Other components of equity 99,231,014 99,153,681 Cost of leasing (Note 10) 227,747,720 237,813,561 266,766,649 Retained earnings 7,590,086,701 6,922,976,884 Cost of services 276,552,505 270,726,596 237,706,828 Remeasurement loss on defined benefit plan (66,042,430) (34,579,987) 6,159,703,860 3,315,021,157 3,405,724,064 Total Equity Attributable to Equity Holders GROSS PROFIT 4,542,174,431 3,390,750,741 2,858,827,794 of the Parent Company 16,354,196,230 15,718,471,523 Non-controlling interest (Note 19) 1,109,270,329 537,149,940 GENERAL, ADMINISTRATIVE AND Total Equity 17,463,466,559 16,255,621,463 SELLING EXPENSES (Note 20) 3,254,526,410 2,964,062,656 2,619,824,830 TOTAL LIABILITIES AND EQUITY P=49,366,682,829 P=42,555,650,621 OTHER INCOME (EXPENSES) Interest and other income (Note 23) 568,656,249 801,077,513 767,406,920 Gain from change in fair value of investment See accompanying Notes to Consolidated Financial Statements. properties (Note 10) 376,898,561 286,028,260 348,260,010 Gain (loss) from change in fair value of derivatives (Note 12) 115,791,961 (35,614,007) (108,370,111) Share in net earnings of joint ventures and associate (Note 9) 12,430,580 – – Interest and other financing charges (Note 24) (594,275,763) (403,480,265) (190,094,777) Unrealized foreign exchange losses (Note 16) (145,192,729) (53,850,000) (77,218,787) 334,308,859 594,161,501 739,983,255 INCOME BEFORE INCOME TAX 1,621,956,880 1,020,849,586 978,986,219 PROVISION FOR INCOME TAX (Note 26) 503,770,261 370,924,446 252,054,222 NET INCOME 1,118,186,619 649,925,140 726,931,997 OTHER COMPREHENSIVE INCOME (OCI) Items that will not be reclassified to profit or loss in subsequent periods: Remeasurement gain (loss) on defined benefit plan - net of tax effect (Note 25) (31,462,443) 26,306,821 190,132 Net change in fair value of equity instruments at fair value through OCI 77,333 (367,097) (64,808) TOTAL COMPREHENSIVE INCOME P=1,086,801,509 P=675,864,864 P=727,057,321

Net income attributable to: Equity holders of the Parent Company (Note 19) P=985,915,365 P=630,312,075 P=726,931,997 Non-controlling interests (Note 19) 132,271,254 19,613,065 – P=1,118,186,619 P=649,925,140 P=726,931,997

Total comprehensive income attributable to: Equity holders of the Parent Company (Note 19) P=954,530,255 P=656,251,799 P=727,057,321 Non-controlling interests (Note 19) 132,271,254 19,613,065 – P=1,086,801,509 P=675,864,864 P=727,057,321

Basic/diluted earnings per share (Note 19) P=0.085 P=0.054 P=0.063

See accompanying Notes to Consolidated Financial Statements.

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220 Century Properties Group Annual Report 2018 TURN OF THE CENTURY – FINANCIALS 221 CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016 CENTURY PROPERTIES GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Total Equity Attributable to Equity Holders of the Parent Company Additional Other Remeasurement Capital Paid-in Treasury Components Retained Loss on Defined Non-controlling Stock Capital Shares of Equity Earnings Benefit Plan Total Interest Total Years Ended December 31 At January 1, 2018,as previously reported P=6,200,853,553 P=2,639,742,141 (P=109,674,749) P=99,153,681 P=6,922,976,884 (P=34,579,987) P=15,718,471,523 P=537,149,940 P=16,255,621,463 Effect of adoption of new accounting 2017 2016 standards (Note 2) – – – – (118,805,549) – (118,805,549) 18,508,083 (100,297,466) (As restated - (As restated - At January 1, 2018, as restated 6,200,853,553 2,639,742,141 (109,674,749) 99,153,681 6,804,171,335 (34,579,987) 15,599,665,974 555,658,023 16,155,323,997 Net income – – – – 985,915,365 – 985,915,365 132,271,254 1,118,186,619 2018 see Note 2) see Note 2) Cash dividends (Note 19) – – – – (199,999,999) – (199,999,999) – (199,999,999) Investment from non-controlling interest (Note 19) – – – – – – – 421,341,052 421,341,052 CASH FLOWS FROM OPERATING ACTIVITIES Others (Note 25) – – – 77,333 – (31,462,443) (31,385,110) – (31,385,110) At December 31, 2018 P=6,200,853,553 P=2,639,742,141 (P=109,674,749) P=99,231,014 P=7,590,086,701 (P=66,042,430) P=16,354,196,230 P=1,109,270,329 P=17,463,466,559 Income before income tax P=1,621,956,880 P=1,020,849,586 P=978,986,219 Adjustments for: At January 1, 2017 P=6,200,853,553 P=2,639,742,141 (P=109,674,749) P=58,869,696 P=6,497,730,643 (P=60,886,808) P=15,226,634,476 P=119,785,810 P=15,346,420,286 Interest and other financing charges (Note 24) 594,275,763 403,480,265 190,094,777 Net income – – – – 630,312,075 − 630,312,075 19,613,065 649,925,140 Cash dividends (Note 19) – – – – (205,065,834) – (205,065,834) − (205,065,834) Unrealized foreign exchange losses (Note 16) 145,192,729 53,850,000 77,218,787 Investment from non-controlling interest (Note 19) – – – 40,651,082 – – 40,651,082 397,751,065 438,402,147 Depreciation and amortization (Notes 11, 12 and 20) 37,854,976 33,242,675 28,632,248 Others – – – (367,097) – 26,306,821 25,939,724 − 25,939,724 Retirement expense (Note 25) 35,599,727 37,751,907 38,110,644 At December 31, 2017 P=6,200,853,553 P=2,639,742,141 (P=109,674,749) P=99,153,681 P=6,922,976,884 (P=34,579,987) P=15,718,471,523 P=537,149,940 P=16,255,621,463 Interest income (Notes 5 and 23) (385,108,364) (712,443,530) (698,788,633) At January 1, 2016 P=6,200,853,553 P=2,639,742,141 (P=109,674,749) (P=11,795,550) P=5,975,821,590 (P=61,076,940) P=14,633,870,045 P=− P=14,633,870,045 Gain from change in fair value of investment Net income – – – – 726,931,997 − 726,931,997 − 726,931,997 Cash dividends (Note 19) – – – – (205,022,944) – (205,022,944) − (205,022,944) properties (Note 10) (376,898,561) (286,028,260) (348,260,010) Investment from non-controlling interest (Note 19) – – – 70,730,054 – – 70,730,054 119,785,810 190,515,864 Unrealized loss (gain) from change in fair value of Others – − − (64,808) − 190,132 125,324 − 125,324 derivatives (Note 12) (115,791,961) 35,614,007 108,370,111 At December 31, 2016 P=6,200,853,553 P=2,639,742,141 (P=109,674,749) P=58,869,696 P=6,497,730,643 (P=60,886,808) P=15,226,634,476 P=119,785,810 P=15,346,420,286 Gain on sale of investment property (Notes 10 and 23) (12,941,360) – – See accompanying Notes to Consolidated Financial Statements. Share in net earnings of joint ventures and associate (Note 9) (12,430,580) – – Provision for impairment losses on receivables (Note 5) – 9,864 – Operating income before working capital changes 1,531,709,249 586,326,514 374,364,143 Decrease (increase) in: *SGVFS033554* Receivables (2,213,568,278) 1,839,323,458 2,207,945,192 Contract assets 1,750,670,292 – – Real estate inventories (1,578,749,310) (1,074,982,095) (1,573,944,250) Advances to suppliers and contractors (272,146,577) 27,851,082 (777,469,210) Other assets (159,280,029) (196,768,798) 165,492,398 Increase (decrease) in: Liability from purchased land (79,473,009) (72,802,321) (119,367,773) Accounts and other payables 1,157,531,784 (221,552,495) 822,398,899 Contract liabilities (464,274,871) – – Customers’ deposits – 398,242,052 306,460,671 Net cash provided by (used in) operations (327,580,749) 1,285,637,397 1,405,880,070 Interest received (Notes 4 and 23) 62,625,758 47,240,579 42,635,726 Interest and other financing costs paid (1,541,894,515) (1,082,005,958) (956,980,604) Income taxes paid (319,165,692) (432,721,940) (522,212,008) Retirement benefits paid (Note 25) (29,499,275) (1,748,518) (1,630,875) Net cash used in operating activities (2,155,514,473) (183,598,440) (32,307,691)

CASH FLOWS FROM INVESTING ACTIVITIES Decrease in due from related parties 96,891,440 41,832,372 (475,523) Proceeds from sale of investment properties (Note 10) 179,598,017 – – Proceeds from disposal of property and equipment 2,070,400 163,303 1,980,221 Additions to: Deposits for purchased land (Note 8) (342,167,634) (423,539,188) (288,684,213) Investment properties (Note 10) (1,981,590,313) (1,236,009,408) (252,172,683) Property and equipment (Note 11) (232,121,247) (614,258,721) (170,215,881) Investments in and advances to joint ventures – (1,044,000) (6,955,900) Net cash used in investing activities (2,277,319,337) (2,232,855,642) (716,523,979)

(Forward)

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222 Century Properties Group Annual Report 2018 TURN OF THE CENTURY – FINANCIALS 223 - 2 -

Years Ended December 31 2017 2016 (As restated - (As restated - 2018 see Note 2) see Note 2)

CASH FLOWS FROM FINANCING ACTIVITIES Availment of short-term and long-term debt (Note 16) P=11,359,147,970 P=6,692,140,393 P=10,083,480,368 Additional investment from non-controlling interest (Note 19) 421,341,052 438,402,146 190,515,864 Proceeds from deposits for preferred shares (Note 31) 201,678,447 196,590,150 158,012,121 Repayments of bonds payable (Note 17) – (1,187,360,000) – Repayments of short-term and long-term debt (Note 16) (6,814,295,001) (5,183,131,809) (8,303,192,199) Payments of cash dividends (Note 19) (199,999,999) (205,065,834) (205,022,944) Decrease in due to related parties 14,991,684 (277,834,457) 159,785,681 Net cash provided by financing activities 4,982,864,153 473,740,589 2,083,578,891

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 550,030,343 (1,942,713,493) 1,334,747,221 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR (Note 4) 1,400,358,850 3,343,072,343 2,008,325,122

CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 4) P=1,950,389,193 P=1,400,358,850 P=3,343,072,343

See accompanying Notes to Consolidated Financial Statements.

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224 Century Properties Group Annual Report 2018 TURN OF THE CENTURY – FINANCIALS 225

TURN OF THE CENTURY

CENTURY PROPERTIES ANNUAL REPORT 2018